An analysis of the dividend withholding tax in South Africa and a brief discussion on how it compares to other developing countries

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dc.contributor.authorThoothe, Neo Violet
dc.date.accessioned2015-02-04T08:22:30Z
dc.date.available2015-02-04T08:22:30Z
dc.date.issued2015-02-04
dc.descriptionThesis (M.Com. Taxation) -- University of Witwatersrand, Faculty of Commerce, School of Accountancy, 2014.en_ZA
dc.description.abstractThe taxation of dividends at shareholder level has been the norm in the majority of the international market. South Africa is a developing country that is constantly increasing its market share in the international stage and in order to be more competitive in the international market South Africa has to align itself with international norms and practices and this resulted, amongst other things, with the introduction of dividends tax in 2012. This study analysed the new dividends tax legislation that became effective on 1 April 2012 in South Africa, by way of a normative literature review, and briefly discusses how South Africa compares with Russia, India and China, three other developing countries. The literature review confirmed the benefits with regards to the dividends tax system; however, the review also confirmed that there are challenges within the dividends tax system. The benefits of the dividends tax system that were noted include amongst others; aligning South Africa with international tax norms, the increased tax base and the establishment of a familiar withholding tax system that can attract more foreign investment. The levying of dividends tax on beneficial owners results in an increased tax base because the number of taxpayers increases to companies and individuals, versus levying secondary tax on companies only on the companies paying the dividend. Some of the challenges of the dividends tax system are the administrative burden placed on companies and regulated intermediaries, the rate of 15% might be considered to be too high in comparison to other developing countries and the taxation of dividends in the hands of the individuals might be a disincentive to invest in equity shares. South African legislation on dividends tax differs from that of China; with the latter country taxing the dividends in the hands of the beneficial owners without a requirement on company‘s paying the dividend to withhold the dividends tax. The Russian legislation on taxation of dividends is similar to that of South Africa but taxes the dividend on the net amount. In India the dividend distribution tax is levied in the company making a dividend distribution.en_ZA
dc.identifier.urihttp://hdl.handle.net/10539/16857
dc.language.isoenen_ZA
dc.subjectBeneficial owneren_ZA
dc.subjectDividend distribution taxen_ZA
dc.subjectDividenden_ZA
dc.subjectDividends taxen_ZA
dc.subjectWithhholding taxen_ZA
dc.titleAn analysis of the dividend withholding tax in South Africa and a brief discussion on how it compares to other developing countriesen_ZA
dc.typeThesisen_ZA
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