D.Com. (Accounting) / The income potential and operational advantages of a broad-based sales tax justify the reliance there upon to produce a material part of the tax revenue of a country with a large third-world element in its economy. Since the introduction of sales tax in 1978 it has developed from a relatively inferior tax into an important element of the South African tax structure presently yielding in excess of 25% of total tax revenue. The relevant statute, namely the Sales Tax Act 103 of 1978, has subsequently been amended to ensure certain structural and operational changes to the sales tax system and the rate has been increased from 4% to 12%. The question may therefore well be asked whether the present sales tax system upholds the criteria for an acceptable tax system, namely equity and efficiency, and still meets with the demands of the advancement that has taken place in the south African economy. This issue is fuelled by the common concern expressed about the apparent unacceptable levels of sales tax avoidance and evasion. In order to answer this question a framework for a sales tax system that would ideally suit the economic structure and social conditions of South Africa was devised. This framework shortly requires the sales tax system to be fair, simple, certain and neutral. The existing sales tax system was tested against this framework and apart from certain breaches, such as the taxation of capital and certain intermediate goods and the insufficient official divulgence of information, it was found to be generally efficient. Furthermore, due to the fact that the consumption of exempt foodstuffs decline much faster, as a proportion of income, than the consumption of taxed goods and services as income increases, the sales tax burden was found to be distributed proportionally over the income range. The recent widespread adoption of value added taxes has lead the study to examine and evaluate the additive-, subtractive- and invoice methods of value added taxation...
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:13179 |
| Date | 09 February 2015 |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
| Rights | University of Johannesburg |
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