3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item Balancing taxpayer confidentiality and the public's right to know(2018) Milo, DarioThis research report considers whether the provisions which protect taxpayer confidentiality in the Tax Administration Act (TAA) and the Promotion of Access to Information Act (PAIA) strike the appropriate constitutional balance between privacy and the efficiency of the tax system, and competing rights. These competing rights are freedom of expression, freedom of the media, access to information and open justice. These rights concern the public's right to know information of public interest. The question that is examined is whether the taxpayer confidentiality provisions qualify as reasonable and justifiable limitations on the competing rights. It is submitted that in relation to the prohibition against disclosure of taxpayer information (section 67(3) of the TAA), a public interest defence is required to ensure that the prohibition is constitutional. In relation to requests for taxpayer information in terms of PAIA, the public interest override should apply to section 35 as it does with all other grounds of refusal under PAIA, resulting in taxpayer information of public interest being made available to requesters. Finally, adjudications before the Tax Court should generally take place in public, in contrast to the position adopted in terms of section 124 of the TAA.Item The impact of mineral resource rent tax on the financial performance of mining companies in South Africa(2017) Mathivha, MukondeleliThis study assesses the impact of a change in tax system in South Africa and the effects caused thereof on both the government and mining companies .This is done by comparing different tax models and analyzing the results to determine their suitability to be used in South Africa. A hypothetical case study is used to achieve the goals of the study by employing six different case scenarios under different threshold rates, tax rates and corporate income tax rates on a mining project. An NPV generated from a discounted cash flow under each scenario is used to evaluate the project success, the tax revenue generated shows how much government stands to make. The results show that the project NPV is highest when both the corporate income tax rate and the resource rent tax rate are reduced. The study also reveals reducing the tax rate has a greater effect on changing project NPV and potential government revenue than reducing the threshold rate and/or the corporate income tax rate. An assessment on the readiness of South Africa to changing tax systems shows that although the resource rent tax system can generate high revenues for government, the disadvantages of changing tax systems on the country as a whole currently outweigh the advantagesItem The section 6quin foreign tax rebate as an incentive for South African headquarter companies(2016) Statham, IanThe Katz Commission recognised that South Africa could benefit from multinational enterprise (MNE) groups headquartering in South Africa. MNE headquarter companies create jobs and attract highly skilled individuals who impact on the economies in which they reside. These highly skilled individuals are also high taxpayers in the countries where they provide their services. South Africa has a number of attributes which would encourage MNE groups to headquarter in South Africa but the cost of doing business with the rest of Africa is high due to withholding taxes levied by African countries on technical and management fees. Countries with low tax rates attract MNE groups to headquarter in those countries as this effectively reduces the cost of doing business with the rest of Africa. The National Treasury introduced section 6quin of the Income Tax Act to provide effective relief to the South African taxpayer from double taxation on South African-sourced service fees charged to other countries and, in particular, other African countries. An examination is conducted on the impact of double taxation and whether section 6quin provides more effective relief from double taxation compared to other double tax relief mechanisms available to the South African taxpayer which will incentivise MNE groups to headquarter in South Africa. An analysis is performed on the income tax forfeited by the South African Receiver of Revenue (SARS) in the National Treasury providing this incentive to South African headquarter companies compared to if the headquarter is relocated out of South Africa. The results indicate that section 6quin provides a feasible solution to reducing double taxation on South African-sourced services provided to other African countries which incentivises MNE groups to headquarter in South Africa. If section 6quin is withdrawn from the South African Income Tax Act, MNE groups potentially will not headquarter in South Africa and seek low tax jurisdictions to reduce costs of providing headquarter services into Africa. This study indicates that the fiscus stands to lose more income tax if the MNE group headquarters outside of South Africa compared to the relief provided to the MNE group headquarter company in accordance with section 6quin by reducing income tax payable. This study informs MNE groups seeking to headquarter in South Africa and the National Treasury of the effects of double taxation on South African-sourced services provided to other African countries and the requirement for relief against double taxation. This study highlights the need for the National Treasury to retain section 6quin in the Income Tax Act or provide an alternate suitable solution to reducing double taxation on South African-sourced services provided by South African headquarter companies to other African countries.Item The tax treatment of debt and equity in leverage finance transactions(2016) Tettey, Joseph RydellThis research focuses on large corporate transactions and acknowledges that they play a significant role in the allocation of resources in society. For this reason (1) the composition of firms’ capital structure and (2) how they choose to fund their investments are important. The South African income tax system has a bias towards debt and this bias (1) distorts the financing and investment decisions of firms; and (2) creates international tax arbitrage opportunities. These circumstances are not exclusive to South Africa. In order to address these distortions and loopholes the National Treasury and the SARS Commissioner have introduced complicated interest deduction limitations. This research critically analyses (1) the new adjusted tax rules concerning interest deduction limitations in finance transactions and (2) whether these new rules encourage investment. To assist with this critical analysis we use corporate finance theory to examine debt push-down transactions/structures because these structures are seen as highly tax-efficient for investors (both foreign and local). This research demonstrates that there are many different ways to finance a transaction but ultimately the choice of finance lies along the continuum between the issue of debt or equity. From an economic perspective this research confirms that there is no material reason for the disparate treatment between debt and equity. However from a legal perspective debt and equity instruments are materially distinct and thus tax considerations are influential in selecting the form of finance used in a transaction. This research not only concludes that leverage transactions utilising excessive debt pose a risk to tax revenues, tax sovereignty and tax fairness but also that the artificial statutory treatment of interest deductions on leverage transactions and working capital facilities means that (1) firms’ ability to finance their operations is reduced, (2) the value of firms is reduced and (3) the incentive for investors to invest in South Africa is also reduced.Item Evaluating the fairness of the proposed carbon tax in South Africa(2016) Oro, Ufuo OroAt the 2013 budget presentation, the South African government indicated its intention to introduce carbon tax starting 1 January, 2015 at the rate of R120 per ton of Co2 equivalent. Prior research confirmed that carbon taxes have the potential to increase price levels, make exports uncompetitive and reinforce income inequality. It was suspected that the proposed carbon tax in the face of other similar taxes in South Africa would result in similar outcome. Furthermore, the socio-economic circumstance of South Africa could make the tax unfair to taxpayers. The object of this research was to evaluate the fairness of the proposed carbon tax in South Africa using the tenets of tax fairness Proposed by Smith (1776). The research methodology adopted was content analysis and correspondence analysis to analyse survey responses. The results of the analysis confirmed that the proposed carbon tax would result in price increases, make exports uncompetitive and reinforce income inequality. It was concluded that the proposed carbon tax would be unfair to taxpayers if implemented as currently designedItem The tax treatment of compensation and damages(2015-02-17) Cron, Kevin RichardItem Some tax implications for a South African taxpayer investing in the United States(2015-02-09) Cohen, FarrelItem Capital allowances in terms of South African tax law(2015-02-09) Coetzee, Hendrik Andries