Electronic Theses and Dissertations (Masters)

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    Potential improvements to South African research and development tax incentives: lessons from BRICS countries
    (University of the Witwatersrand, Johannesburg, 2024) Mphephu, Keamogetswe; Ram, Asheer J.
    The South African government is cognisant of the fact that research and development (R&D) is imperative in stimulating innovation, economic development, and global competitiveness. This has resulted in the government adopting various tax incentives to boost R&D activities. Section 11D of the Income Tax Act 58 of 1962 (Income Tax Act) (Republic of South Africa, 1962) governs the R&D tax incentive, which has evolved since its inception in 2006. The initial plan was for section 11D to come to an end in October 2022. However, in the 2023 Budget Speech, the Minister of Finance declared an extension of ten years for the deadline and simplification of the tax provision to enhance effectiveness. This study will analyse South Africa's R&D tax policies in comparison to selected other BRICS member countries (Brazil, Russia, India, China) and examine possible improvements. Through the research study, several important findings were made. One is that R&D tax incentives play a crucial role in stimulating innovation investment by relieving the financial burden on companies and therefore allowing them to focus their resources on R&D. Another important lesson is that streamlining application procedures and providing convenient access to R&D tax incentives play a critical role in promoting high levels of participation and effectiveness. Although the Department of Science and Innovation has taken steps to enhance R&D tax incentives, there remains room for improvement to align them with international best practices. Aligning with international best practices will enable South Africa to improve its R&D tax provision by encouraging innovation and attracting domestic and foreign investment.
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    An assessment and comparison of South Africa’s retirement tax reforms
    (2022) Setshedi, Sphiwe Johannah
    The purpose of this research is to establish whether the retirement tax reforms effected in South Africa are beneficial for individuals. The research analyses whether individuals are better off, given the introduction of the amendments and investigates whether there are any shortcomings from a policy perspective. This paper also takes into consideration whether policy-makers could have implemented a different set of retirement tax reforms. The retirement tax reforms were formally introduced in the Taxation Laws Amendment Bill of 2019 (hereafter TLAB). The main purpose was to ensure uniform tax treatment across the various retirement funds (Taxation Laws Amendment Bill of 2019). In an attempt to achieve these objectives, the tax treatment of provident funds was amended, as follows (Taxation Laws Amendment Bill of 2019): • Employer contributions to provident funds would be treated as a taxable fringe benefit in the employee’s hands. • Members of provident funds, similar to other retirement funds, are required to annuitize upon retirement. The research also investigates whether South Africans are saving enough for retirement, as well as the incentives adopted by the South African government to promote savings for retirement and beyond. During the 2021 Budget Speech, Finance Minister, Tito Mboweni, emphasised that “the proposed amendments to Regulation 28 seek to make it easier for retirement funds to increase investments in South Africa’s infrastructure” (Mboweni 2021). He also reiterated that “provident fund members will continue to enjoy a tax deduction on their retirement contributions, thus continuing the objective of encouraging people to save more towards their retirement” (Mboweni 2021). Once the above has been investigated, South Africans’ retirement tax reform is then compared with the retirement tax regimes of other developing African countries, namely, Namibia and Nigeria’s retirement tax regimes. This comparison is conducted as a means of assessing whether South Africa’s retirement tax provisions are better than the countries mentioned above. 4 This will prove that South Africa’s retirement tax reform is developing, and that government is set on modernising the tax provisions for the benefit of individual taxpayers.