An analysis of tax challenges arising due to digitalisation in South Africa
Date
2019
Authors
Mochusi, Thabang
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Abstract
Since e-commerce started, a lot of studies on its taxability and possible solutions have been done with the aim of enforcing compliance to protect governments from eroding tax bases. The traditional way of doing business is rapidly changing and companies are using e-commerce to trade with each other. Goods and services are exchanged digitally using the internet and various software without physical presence in the state which the goods and services are being provided. As a result, the current traditional tax rules do not effectively address the issue of digitalised business models. At present the enforceability of relevant tax legislation to cater for digitalisation remains a challenge in South Africa and globally. Hence, the focus of this study is to critically analyse the challenges which are brought about by digitalisation to South African tax and recommendations on how the tax rules can be modified to effectively address taxation of digital transactions.
It has been reviewed and found that the greatest challenge that relate to fourth industry revolution from a tax perspective is the enforceability of the relevant tax legislation that was amended to make provision for digital transactions by South Africa. On the other hand, digitalisation also brought with its tremendous opportunities from an enforcement perspective as information can now be collated and linked in order to identify and detect evasion or avoidance with the use of specialised software which tax authorities can use. The research gives details of these main challenges and recommendations to tax policy makers.
Description
A research report submitted to the Faculty of Commerce, Law and Management in partial fulfilment of the requirements for the degree of Master of Commerce in Taxation
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Citation
Mochusi, Thabang Felicity Mmatone. (2019). An analysis of tax challenges arising due to digitalisation in South Africa. University of the Witwatersrand, https://hdl.handle.net/10539/29835