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Sat, Jun 19, 2021

New or higher taxes won’t work, and could be unconstitutional

The trade union federation Cosatu recently called for tax increases, particularly on the wealthy, to arrest South Africa’s economic down spiral. But economist Arthur B Laffer, known for popularising the Laffer curve, shows us that beyond a certain point, tax revenue will decline as tax rates increase.

BOOK REVIEW | Practical Guide to Handling Tax Disputes

Taxpayers and businesses are under increased pressure as a result of the economic downturn and impact of COVID-19. On the flip side, the South African Revenue Service (SARS) is also under pressure to meet targets. A possible outcome of this double-sided scenario is, according to experts, the potential for an increased number of tax disputes in the near future, with SARS attempting to secure revenue and taxpayers wanting to reduce their tax burden.

SARS to ‘name and shame’ tax dodgers

It seems the SARS Commissioner had an epiphany – make an example of delinquent taxpayers so others will fall in line. Apparently, following SARS’ media briefing on 30 July 2020, this is a deterrence tactic SARS will use in the coming filing season.

Most favoured nation clauses

'Most favoured nation' clauses can be found in Double Taxation Agreements (DTA). These clauses are essentially where the tax treatment accorded by one state to another state must be no less favourable than the tax treatment extended to a third state.

Export taxes – do they make sense for South Africa?

South African businesses involved in cross-border trading need to be aware of potential export taxes on the horizon. Export restrictions are on the rise, with export taxes becoming more prevalent. It’s important to note that the South African Customs Act has, for the first time, been amended to deal with export taxes.

Budget 2019 | Personal income tax

Given the economic realities facing the Minister of Finance this year, it is unsurprising that he had a difficult task balancing the need to improve tax revenue with the implications of placing additional tax burdens on the individual taxpayer.

How to use donations effectively in an estate plan

The saying goes that we should pay Caesar what he is due and not what he demands. To achieve this in tax planning, estate planners use donations as one of the ways in which to effectively and legally help individuals reduce the taxable values of their estates. Donations of up to R100,000 per year can be used to reduce estate duty.

Budget 2019 | what can personal income taxpayers expect?

Against the backdrop of the weakening Rand, the pain point of the increased marginal tax rate of 45 per cent, the increase in the VAT rate by 1 percent in April 2018 and the decline in household spend, can South Africans really afford another tax rate hike?


Proposed tax amendments to SA’s controlled foreign company (CFC) rules will adversely impact South African multinationals with foreign subsidiaries that have assessed tax losses,...

Tax – understanding understatement penalty behaviours?

On 1 October 2012 the understatement penalty regime was introduced to replace the additional tax regime. An understatement penalty is determined by applying the highest applicable percentage in the understatement penalty table.


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