3 3) Profitability theory: The ability to earn can also be used as a criterion, but it is problematic when someone inherits money, etc. THREE main tax bases are commonly used: 1) INCOME. 2) CONSUMPTION (expenditure). 3) WEALTH. A fair tax system: the ideal tax system = equality criteria The Margo Commission mentioned the following criteria: Tax neutrality A person should not be influenced by the tax system to choose one course of action over another, so that the tax liability is reduced. Horizontal equity Horizontal equity requires that similar persons in similar circumstances be taxed. Vertical justice means that taxpayers in different circumstances are taxed differently. Security and simplicity safe and easy to evaluate and collect. The cost-effectiveness of tax collection is not expected to be high. Direct and indirect taxes: DIRECT: It is provided and expected that the person who is legally required to pay the tax is the same person who will ultimately be poorer to pay the person`s income tax. 5 Tax incidence: The formal impact rests with the person who is legally bound to pay taxes, but the real impact lies with the person who gets impoverished by levying the tax.
Tax burden: Indication of the overall impact of the tax on a person. Tax law: legislation relating to the collection, assessment and collection of taxes. Treatment of tax legislation Checklist: 1. Determine the tax base. 2. Identify the potential taxpayer. 3. Determine the date or period of responsibility. 4. Determine the tax base. 5.
Determine the tax rate. 6. Set the payment date. 7. Are there any exceptions? Critical studies of law CC. CLS cc 4. Love My Life4804 – TAX NOTES STUDY UNIT 2. THE SOUTH AFRICAN TAX SYSTEM.
TAXES LEVIED BY THE NATIONAL SPHERE OF GOVERNMENT. All taxes levied by the national sphere of government are administered by the South African Revenue Authority (SARS). 9 That rule of English law does not form part of South African law. In South African Pulp and Paper Industries Ltd v. CIR, the appellant (SAPPI). rented a plantation for a period of 30 years. SAPPI acquired the right to cut down the trees and the Commissioner explained that the contract was entered into by SAPPI. It could not be a lease, but another limited real right, since it granted SAPPI a right of use. The Commissioner argued that SAPPI was liable for transfer duties. SAPPI. argued that this was a lease because the felled Saligna trees would regenerate over the 30-year lease period.
The court ruled in favour of SAPPI. In Bozzone v CRITs, the taxable person argued unsuccessfully that the contract, under which he could extract sand and clay for 20 years, was a normal lease. Since the contract involved a right to consumption, the court ruled that it was not a lease and that the plaintiff was liable for transfer tax. 10 ADMINISTRATION. The South African Revenue Service (SARS) is responsible for the administration of the various taxes. OBJECTION AND APPEAL. A taxpayer who feels disadvantaged by the Commissioner`s assessment of various taxes may object to it. It is very important that the grounds of the objection be set out correctly and completely, because if the taxpayer is not satisfied with the Commissioner`s decision and wishes to appeal, the appeal is limited to the reasons set out in the objection (notice of violation). If the taxpayer is not satisfied with the Commissioner`s decision, he or she may apply to a special committee or to the Tax Court. A party that is not satisfied with the critical studies of CC law. CLS cc 6. love my life4804 – TAX Indicates that the judgment can appeal to the High Court and then another appeal to the Supreme Court of Appeal.
TAX AVOIDANCE VERSUS TAX EVASION. 7 Municipalities may not levy income tax, value added tax, general sales tax or customs duties. SOURCES OF SOUTH AFRICAN TAX LAW. Legislation and jurisprudence Legislation: Constitution and various tax laws. Tax matters: South African Law Reports, South African Tax Cases Reports and Juta`s Tax Law Reports. Although the judgments of the Tax Court do not constitute precedents, they have some persuasive value. Secondary sources Manuals and journals. TAX LAW AND THE BILL OF RIGHTS.
(equality, non-discrimination and administrative justice). The Bill of Rights (in the 1996 Constitution). Article 7 of the Constitution states that the Bill of Rights is a cornerstone of democracy in South Africa.
