Browsing by Author "Poyana, Luvuyo Sidewell"

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    A Comparative Analysis of South Africa's Tax Penalty Regime in Relation to the United States of America and the Commonwealth of Australia
    (University of the Witwatersrand, Johannesburg, 2023) Poyana, Luvuyo Sidewell; Viljoen, Michelle
    Undoubtedly, tax compliance poses a significant challenge for all revenue collection authorities. Aspects such as self-assessment and electronic commerce further accentuate the importance of tax compliance. With self-assessment, the onus of calculating the appropriate tax liability and ensuring compliance with payment requirements rests on the taxpayer, rather than the revenue authority. While the Republic of South Africa has recently revised its penalty regime and enacted new legislation through the Tax Administration Act 28 of 2011, replacing the previous regime governed by Sections 75 and 76 of the Income Tax Act 58 of 1962, it remains imperative and pertinent to examine the operative penalty regime. Such an examination is essential to comprehend and confirm the extent and application of penalties in various circumstances. In order to ensure that the penalty regime of the Republic of South Africa is in accordance with internationally recognised best practices, this research report undertakes a comparative analysis with the United States of America and the Commonwealth of Australia. These jurisdictions possess extensive practical experience in the realm of tax administrative laws over an extended period. By drawing upon their insights, valuable lessons can be gleaned to enhance the effectiveness and alignment of South Africa's penalty regime. This research report aims to provide insights into the effectiveness of South Africa's penalty regime and identify potential areas for improvement by examining the similarities and differences in the implementation and administration of non-compliance and understatement penalties in the Republic of South Africa (RSA), the United States of America and the Commonwealth of Australia. By analysing the penalty regimes of these three countries, the research report identifies challenges or disputes that may arise with reference to previous litigations and provide policymakers and tax authorities with valuable information to improve the administration and implementation of penalties. The report suggests that, while the establishment of the new Tax Administration Act, No 28 of 2011, has demonstrated a standardised and systematic approach to non-compliance and understatement penalties, the subjective nature of the taxpayer’s behaviour is always going to result in non-compliance by some taxpayers. The comparison indicates that the South African penalty regime is relatively high in terms of understatement penalties and lower in terms of non-compliance penalties. However, the overall administrative penalties are broadly aligned with the Commonwealth of Australia and the United States of America.