scholarly journals Reportable arrangements: Tax partner perceptions of some problematic terminology

2014 ◽  
Vol 7 (1) ◽  
pp. 145-186
Author(s):  
Lee-Ann Steenkamp ◽  
Peter Cramer
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
Reporting System ◽  
The South ◽  
Literature Study ◽  
Public Comment ◽  
Research Findings ◽  
Partner Perceptions

The South African Revenue Service (SARS) implemented a more aggressive reporting system in 2008 by introducing new reportable arrangements ('RA') provisions in the Income Tax Act. In March 2010, SARS issued a revised Draft Guide to Reportable Arrangements for public comment. More than three years after its release, there is still no finalised, updated guide available to address the 'new' RA provisions. Determining when arrangements should be reported to SARS therefore remains both problematic and onerous. It is the purpose of this article to examine some of the problematic terminology in an attempt to afford South African taxpayers greater clarity in the identification and disclosure of RAs. The research findings are tested through a survey conducted among tax partners and directors at a sample of 40 leading audit and legal firms in South Africa. The majority of respondents agreed with the conclusions drawn from the literature study.

scholarly journals An evaluation of the income tax treatment of client loyalty programme transactions by South African suppliers

2015 ◽  
Vol 8 (1) ◽  
pp. 145-164
Author(s):  
Sophia Brink
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
International Literature ◽  
Financial Loss ◽  
The South ◽  
The Past ◽  
Loyalty Programme

The popularity of client loyalty programmes has increased drastically over the past few years, with more than 100 suppliers in South Africa currently making use of them. Despite the fact that client loyalty programmes have been prevalent in South Africa since the 1980s, the South African Revenue Service has issued no specific guidance on the income tax treatment of client loyalty programme transactions. The main objective of the research was to determine whether South African client loyalty programme suppliers treat client loyalty programme transactions correctly for income tax purposes. In order to meet this objective, available local and international literature were analysed to determine the proposed income tax treatment of a client loyalty programme transaction expenditure incurred by supplier for purposes of the client loyalty programme. The proposed correct income tax treatment was compared with a survey circulated to a population of client loyalty programme suppliers in South Africa. The comparison indicated that in practice the Income Tax Act No. 58 of 1962 is treated differently from the proposed treatment. This incorrect tax treatment could result in possible financial loss to the client loyalty programme supplier as taxpayer.

scholarly journals An investigation into the future of discretionary trusts in South Africa: An income tax perspective: Part 2

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Sophia M. Brink
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
Tax Planning ◽  
Literature Study ◽  
Estate Planning ◽  
National Budget ◽  
Tax Practitioners ◽  
The Future ◽  
Legislative Measures

Background: Trusts have long been used as an estate planning mechanism, including the avoidance of estate duty and donations tax. In the 2016 National Budget the Minister of Finance indicated that Government was proposing several legislative measures during 2016/2017 to prevent individuals from using a trust to avoid estate duty (and donations tax to a certain extent). Unexpectedly, the 2016 draft Taxation Laws Amendment Bill and the final Amendment Bill did not give effect to any of these proposals, but introduced other less drastic measures to control the abuse of trusts for tax purposes, albeit with the same stated purpose.Aim: The main aim of the study was to clarify the reform proposals (albeit unclear and consequently based on certain assumptions) and to compare the reform proposals with the final amendments. This comparison will shed some light on the fairness and appropriateness of the final amendments and, more importantly, on the possibility that the reform proposals published by National Treasury in February 2016 not included in the final amendments will be enacted in the future. This investigation will assist tax practitioners and taxpayers in effective tax and estate planning, given that the reform proposals and final amendments have a possible impact on the future of discretionary trusts in South Africa.Setting: This article examines existing literature in a South African income tax environment.Methods: In order to meet this objective a qualitative approach based on a literature study of pure theoretical aspects was used.Results and conclusion: It was found that should the reform proposals become law, many trusts would become ineffective from a tax-planning perspective and these changes might erode other benefits trusts offer, jeopardising the future of discretionary trusts in South Africa.

scholarly journals Public Procurement in the South African Economy: Addressing the Systemic Issues

2020 ◽  
Vol 12 (20) ◽  
pp. 8692
Author(s):  
David Fourie ◽  
Cornel Malan
Keyword(s):  
South Africa ◽  
Public Sector ◽  
South African ◽  
Public Procurement ◽  
The South ◽  
Literature Study ◽  
Goods And Services ◽  
Official Policy ◽  
The Status ◽  
Procurement System

Public procurement fulfils an important role in the economy and public expenditure of a country and can be regarded as a critical indicator of the effectiveness of a government, because it is a central aspect of public service delivery. Notwithstanding various reforms made to date to public sector procurement in South Africa and the application of Supply Chain Management as a strategic policy strategic instrument, the South African public procurement system still faces several challenges and has been strongly criticised. This paper aims to understand the current public procurement environment in South Africa, its dilemmas and challenges, and to propose that public procurement be refocused towards a strategically placed business process, implemented by well-trained and competent procurement officials. The purpose is to provide a theoretical foundation as well as practical guidance regarding the role of public procurement in the South African public sector. The methodology involved an intensive literature study and document analysis to evaluate various official policy documents and official publications to determine the status of South African public procurement. The study found that the majority of challenges faced by public procurement in South Africa can probably be attributed to the implementation of the system, rather than to the system itself. In the shorter and longer term, the public procurement system in South Africa will have no choice but to emerge as a stronger, more resilient, streamlined and efficient provider of goods and services for the greater good of all.

scholarly journals Exploring the South African tax consequences of a residential property lottery

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Silke De Lange ◽  
Danielle Van Wyk
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
Capital Gains ◽  
Residential Property ◽  
Research Approach ◽  
Exploratory Research ◽  
Capital Gains Tax ◽  
The South ◽  
Residential Properties

Background: Disposing of a residential property by way of a lottery sounds peculiar, but a number of these transactions relating to residential properties in South Africa have recently taken place. As this is not an ordinary way of disposing of and acquiring residential property, it is submitted that it is necessary to explore the tax consequences resulting from such a transaction. Aim: The objective of this article is to explore some of the most pertinent South African tax consequences of such a residential property lottery transaction, from the viewpoint of the owner (‘seller’) who disposes of the residential property and the winner (‘purchaser’) who acquires the residential property in terms of the lottery. Setting: This article examines existing literature in a South African income tax environment to explore the tax consequences resulting from a disposal and acquisition of residential property by way of a lottery. Methods: A non-empirical study, which entails the study of the various South African tax provisions and an application thereof to the facts of the lottery transaction, was conducted. A doctrinal research approach was followed within the realm of exploratory research. Results: Disposing of and acquiring residential property by way of a lottery results in a number of actual tax consequences, as well as a number of uncertainties regarding taxes (referred to as uncertain considerations). Conclusion: The conclusion is reached that the possible tax consequences of such a transaction can create tax risks or can result in unintended tax consequences relating to inter alia income tax (including capital gains tax), transfer duty and donations tax. The insights provided in this article do not always result in conclusive answers but they may, however, result in further research to be conducted, and a number of such areas for further research were identified. Should residential property lottery transactions occur more frequently in South Africa in future, it is recommended that the South African Revenue Services (SARS) issues clear guidance on the tax treatment from the perspective of the owner and the winner of such a transaction to ensure that any uncertainties are dealt with correctly.

scholarly journals DEVELOPING THE SUBSTANCE OVER FORM DOCTRINE IN TAXATION AFTER THE JUDGEMENT IN COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE v NWK

2018 ◽  
Author(s):  
Johan Coertze
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
The South ◽  
True Nature ◽  
Type Of Abuse ◽  
The Law

In 1936 Lord Tomlin in IRC v Duke of Westminster (hereafter ‘Duke’)1 concluded that it is trite law that every man (and woman) is entitled to arrange his or her affairs as to pay the least amount of tax under the appropriate statutes. This sentiment has been a cornerstone of South African tax jurisprudence and was again repeated in Commissioner for the South African Revenue Service v NWK Ltd (hereafter ‘NWK’).2 This broad liberty in arranging one’s own tax affairs has, however, led some taxpayers to dress up their transactions and hide their’ true nature as to ‘either … secure some advantage which otherwise [the law] would not give, or to escape some duty which otherwise the law would impose’.3 The most prominent tool the courts can use to try and curb this type of abuse is the General Anti-Avoidance Rules (hereafter ‘GAAR’) in Section 80A to 80L of the Income Tax Act 58 of 1962 (hereafter ‘the Act’), other specific anti-avoidance provisions in the Act4 and the substance over form doctrine (hereafter ‘the doctrine’). This article is a reflection on the taxation in South Africa, but specifically anti-avoidance provisions as provided by legislation.

scholarly journals Factors influencing the implementation of the auditor general’s recommendations in South African municipalities

2020 ◽  
Vol 8 (1) ◽  
Author(s):  
Lesedi S. Matlala ◽  
Dominique E. Uwizeyimana
Keyword(s):  
South Africa ◽  
Local Government ◽  
South African ◽  
Progress Monitoring ◽  
Empirical Studies ◽  
The South ◽  
Literature Study ◽  
Factors Influencing ◽  
Auditor General

Background: The establishment of democratic local government in South Africa in 2000 decentralised the decision-making powers from the centre to the periphery. Municipalities are accountable for their own financial preparation and the planning of their budgetary processes. Notwithstanding the enormous investment in terms of resources, empirical studies and municipal audit reports revealed that most of the South African municipalities were not taking corrective action on the issues of irregularities raised in prior year audits; hence, some of the weaknesses and problems remained unresolved or were recurring yearly.Objectives: To identify and discuss the factors that influence municipalities’ failure to implement audit recommendations given by the Auditor General of South Africa (AGSA) efficiently and effectively.Methods: The research methodology used in this study was mainly qualitative and relied heavily on robust literature study and the review of key official documents, such as reports on local government performance.Results: The main findings of this study are that factors influencing implementation of audit recommendation include availability of resources and time, lack of audit action monitoring processes, absence of authority, staffing problems and sometimes the poor quality of audit recommendations.Conclusion: To deal with these problems, the study recommends a number of practical strategies. These include regular progress monitoring, improving the quality of the AGSA’s recommendations and the amendment of the Public Audit Act to empower the auditor general. Most importantly, the study recommends the establishment of a monitoring and evaluation (ME) unit to regularly track progress for proper implementation of audit recommendations in the South African municipalities.

Revitalising the South African Museum Sector

2018 ◽  
pp. 372-395
Author(s):  
Helene Vollgraaff
Keyword(s):  
South African ◽  
Professional Associations ◽  
Policy Recommendations ◽  
Institutional Performance ◽  
The South ◽  
Literature Study ◽  
Museum Management ◽  
Recruitment Practices ◽  
Museum Professionals ◽  
Research Findings

The chapter discusses the South African museum sector in terms of changing museum functions as well as museum management. The research findings confirm the perception of a sector in crisis. Museum professional associations do not have the capacity to promote a professional museum service. Though there are museum professionals that keep up to date with museological trends and technology, a picture is painted of museums not supported by government departments, debilitating bureaucratic structures that hamper creativity and responsiveness to public demands, institutional performance structures that direct museums away from museum functions, problematic recruitment practices, and problematic models assessing the value of museums. Research is based on literature study, a review of the South African Museums Association Bulletin (SAMAB), a peer-reviewed journal dealing with museum matters, an analysis of policy recommendations of museum professional associations and interviews with the museum association leadership.

scholarly journals The extent of benchmarking in the South African financial sector

2014 ◽  
Vol 9 (3) ◽  
pp. 315-321 ◽  
Author(s):  
W Vermeulen
Keyword(s):  
South Africa ◽  
South African ◽  
Financial Sector ◽  
The South ◽  
Improve Performance ◽  
Research Project ◽  
Effective Implementation ◽  
Current State ◽  
Business Excellence ◽  
Research Findings

Benchmarking is the process of identifying, understanding and adapting outstanding practices from within the organisation or from other businesses, to help improve performance. The importance of benchmarking as an enabler of business excellence has necessitated an in-depth investigation into the current state of benchmarking in South Africa. This research project highlights the fact that respondents realise the importance of benchmarking, but that various problems hinder the effective implementation of benchmarking. Based on the research findings, recommendations for achieving success are suggested. 

scholarly journals An evaluation of interest deduction limitations to counter base erosion in South Africa

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Pieter Van der Zwan ◽  
Daniel P. Schutte ◽  
Waldo Krugell
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
The South ◽  
Profit Shifting ◽  
Present Evidence ◽  
Tax Legislation ◽  
Tax Returns ◽  
The Mean ◽  
Using Data

Background: The Organisation for Economic Cooperation and Development (OECD) made a number of recommendations in relation to interest deduction limitations as part of the Base Erosion and Profit Shifting (BEPS) project. In 2016 the South African National Treasury indicated that the interest deduction limitations contained in the Income Tax Act would be reviewed in the light of these recommendations. Aim: This paper aimed to describe funding structures of companies in South Africa liable for tax and how this relates to other characteristics, including ownership, of the companies. Setting: The research was performed using data from tax returns submitted by companies liable for income tax in South Africa. Methods: This paper reports on descriptive analyses of the research conducted. Results: The results showed that the mean interest-to-earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratio for certain foreign-owned entities differed significantly from that of domestically owned entities. Conclusion: The results may present evidence of profit-shifting activities. They also highlight trends in interest-to-EBITDA ratios that may be of relevance for future legislative developments. Further related research is required if interest deduction limitations in the South African tax legislation are to be reviewed in light of the OECD proposals.

A predictive framework for sustainable youth skills development

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arnesh Telukdarie ◽  
Megashnee Munsamy ◽  
Popopo Jonas Mohlala ◽  
Lesego Lydia Monnapula ◽  
Radhakrishnan Viswanathan
Keyword(s):  
South Africa ◽  
South African ◽  
Global Analysis ◽  
Skills Development ◽  
The South ◽  
Literature Study ◽  
Content Type ◽  
The Impact ◽  
Sd Model ◽  
Global Learners

PurposeThe purpose of this research is to investigate sustainable strategies for skills development that is specific to the youth of South Africa. International and South African data are statistically analysed and quantified to provide inputs for the systems dynamics (SD)-based predictive skills model. The skills model simulates the impact of barriers and drivers on youth skills development towards identification of focus areas for improvement.Design/methodology/approachThe research adopts a mixed-methods approach. The study begins with an explorative literature study on skills development, with the findings applied in developing (1) South African specific research instruments for small, medium and micro enterprises (SMMEs) and skills programme grant recipients and (2) a conceptual framework of the SD predictive skills model. The responses to the South African specific instruments are analysed via confirmatory factor analysis (CFA), which quantifies the input coefficients to the system dynamics model. To quantify the global inputs for the SD model, an in-depth literature review of the global skills development initiatives is conducted. The SD model output on skills, for the South African inputs, is comparatively evaluated against global inputs.FindingsThe paper details the results of the literature analysis, instrument analyses, CFA and SD model. The instrument results rank experience, skills and interactions with experts and work-based learning as most important. South African and global learners identify networking as the primary medium for identifying training and employment opportunities. South African and global learners also identify qualifications and work-based experience as key to finding employment. The quantified results of the SA and global analysis are used as inputs in the SD model to deliver a forecasting tool. The SD model finds that the global data provide for better development of the skills base than the South African inputs. The key focus areas identified for improvement in South Africa include networking, work-based experience and a reduction in administrative requirements.Originality/valueThe research's originality resides in the ability to predict the impact of drivers and barriers on skills development. This research sought to transform qualitative global and South African inputs into a consolidated, predictive systems-based model. The SD model can be adopted as an indicator of drivers and barriers focused towards the optimisation of skills development.

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