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Die belangrikheid van onregstreekse belasting met spesifieke verwysing na belasting op toegevoegde waarde

M.Com. (Economics) / The objective of the thesis is to examine the fiscal importance' of indirect taxation with specific reference to value added taxation. The investigation takes cognisance of the unique characteristics of the South African economy, especially its strong dualistic characteristics, very unequal distributlon of income and extensive backlogs in the areas of social services and infrastructure. The South African tax system has undergone a rather fundamental shift in the early 1970s when the sales duty was replaced by a general sales tax. This tax, implemented in July 1978 at the rate of 4 per cent provided for the exemption of basic foodstuffs and the issuing of exemption certificates mandating the non-taxation of certain goods. These certificates led to abuse and fraud. The tax was a cascading tax and double taxation was an inherent characteristic of it. Within 13 years of its existence the rate of the tax soured to 13 per cent. An European-styled value added tax, engineered on the New Zealand model, was implemented in September 1991. Value added tax has in the past been criticised on account of its regressive properties. Unions have depicted value added tax as an unfair tax because of its skewed income and wealth effects. Providing relief for the perceived regressivity of valued added tax is not an easy decision. The regressivity of value added tax can be reduced by zero ratings, differential rates and exemptions, but it was found that there are convincing reasons why the value added tax base should be kept as broad as possible. Internationally it is accepted that economic distortions are kept to a minimum when value added tax is levied on a broad base with a minimum number of zero ratings and differential rates. A broadly based tax effects current and future consumption to the same degree and is therefore neutral as to consumption and saving. Irrespective of this best-policy-advice, various countries still make considerable use of zero ratings and differential rates to lessen the regressivity of the tax system. Theoretically value added tax does not add to inflationary pressures. Notwithstanding this theoretical view there is some evidence that value added tax could sometimes lead to cost push inflation should compensating salary increases follow after a broadening of the base. The dissertation agrees with South African studies indicating that the cascading effects of value added tax is negligible. Although the rate of inflation increased during the twelve month period following the introduction of the tax in South Africa, it had an once-off impact on the general level of prices and could thus not be typified as inflation. Financial services are by and large exempted from value added tax due to its many definitional problems. In this connection, the Poddar-English model is regarded by some observers as a means of addressing this problem. The model does not provide solutions for all the problems and remains to a large extent impractical. Notwithstanding this, the extension of the tax base to include financial services will enhance the efficiency of the tax.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:11132
Date20 May 2014
CreatorsSchneider, Ferdinand Dirk
Source SetsSouth African National ETD Portal
Detected LanguageEnglish
TypeThesis
RightsUniversity of Johannesburg

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