Perceptions of taxation : a comparative study of different population groups in South Africa

South Africa is a country of diverse cultures, languages, beliefs and backgrounds. It is con-ceivable that these different population groups may have differing perceptions of taxationresulting from their cultural backgrounds or even their political and social histories. Theseperceptions may, in turn, influence their attitudes towards tax compliance. It is, therefore,argued that in order to change taxpaying behaviour, perceptions must be first be identified,and then influenced in a positive way towards tax compliance.This study extends prior research by investigating and comparing taxpayers’ perceptionsamongst the four major South African population groups (that is, Black/African, Indian,Coloured and White).The data for this study was collected from a sample of 260 South African taxpayers bymeans of face-to-face interviews, based on a questionnaire, compiled from an extensiveliterature review. The scope of the study was limited as it focused only on natural taxpayerswithin the Tshwane metropolitan area (which includes Pretoria, the capital city of SouthAfrica) in Gauteng, as the purpose was not to generalise conclusions to the entire SouthAfrican population.It was found that different population groups in South Africa may have different percep-tions towards taxation. In order to create a more positive tax culture, government couldpossibly focus more strongly on educating the various population groups about the impor-tance of paying their taxes. A multifaceted approach is needed in order to understand andinfluence the large number of factors that play a role in individual behaviour.http://www.journals.elsevier.com/public-relations-review/hb201

Possible reasons for tax resistance in South Africa : a customised scale to measure and compare perceptions with previous research

Tax resistance takes two major forms, namely tax avoidance and tax evasion both of which diminish a government's tax receipts. Limited research on taxpayers’ perceptions has been conducted in South Africa. A study was undertaken in order to determine the perceptions of South African taxpayers about various aspects with regard to taxation. There are no standardised scales to measure taxpayers’ perceptions. The reasons for evading taxes, however, have been explored by both economists and psychologists. This article elaborates on the design of a measurement tool for determining taxpayers’ perceptions taking previous research into account. In addition, this article assesses whether findings from the current research substantiates earlier research. The results of the current study confirmed the majority of findings from past research. The significance of this study is emphasised, in that it builds on previous research, utilising insights from several disciplines and various theoretical perspectives.http://www.journals.elsevier.com/public-relations-review/hb201

CIR v Niko : a question of economic reality

This article analyses the facts and judgment in CIR v Niko, involving the transfer of business assets from a sole trader to a company, the shares of which were substantially owned by the same sole trader. This case changed the inherently fl awed, but prevailing practice at that stage of regarding a lump-sum payment from a lock-stock-and-barrel sale of a business as a receipt of a capital nature, to a receipt that needed to be allocated to the various assets included in the sale, and therefore potentially the receipt would be partly of a capital and partly of a revenue nature. Although the conclusion relating to lock-stock-and-barrel sales in general was sound, the submission made in this article is that, in the particular circumstances of the case, the economic reality of the transaction was not considered – virtually no economic gain was realised by J. Niko, the seller and sole owner of the business to a company of which he was also the substantial shareholder. Two subsequent court decisions, which similarly ignored the economic reality of the transactions in the context of a group of companies, followed this judgment. In this article, the problematic nature of the decisions that ignored the economic reality of the transactions is demonstrated with reference to accepted canons of a good taxation system. The article also explains the partial legislative relief that has subsequently been granted for transfers of assets from a person to a company and for transfers within a group of companies, but concludes that there is a need for full recognition of a group of companies as an economic entity for tax purposes.http://www.unisa.ac.za/default.asp?Cmd=ViewContent&ContentID=22335am201

Meson Cloud of the Nucleon in Polarized Semi-Inclusive Deep-Inelastic Scattering

We investigate the possibility of identifying an explicit pionic component of the nucleon through measurements of polarized $\Delta^{++}$ baryon fragments produced in deep-inelastic leptoproduction off polarized protons, which may help to identify the physical mechanism responsible for the breaking of the Gottfried sum rule. The pion-exchange model predicts highly correlated polarizations of the $\Delta^{++}$ and target proton, in marked contrast with the competing diquark fragmentation process. Measurement of asymmetries in polarized $\Lambda$ production may also reveal the presence of a kaon cloud in the nucleon.Comment: 23 pages REVTeX, 7 uuencoded figures, accepted for publication in Zeit. Phys.

Perceptions of taxation : a comparative study of different individual taxpayers in South Africa

In South Africa, there is a significant gap between the amount of tax that is theoretically collectable from economically active persons and that which is actually collected (commonly known as the tax gap). Non-compliance by taxpayers is one of the main causes of the tax gap. It has been established that one of the main factors leading to non-compliance, is the attitudes and perceptions of people. This article extends prior research by investigating and comparing perceptions amongst different individual taxpayers. It is specifically aimed to determine individual South African taxpayers’ perceptions regarding general tax-related, tax evasion and tax compliance issues. A number of demographic, economic or other factors that might influence respondents’ perceptions regarding these issues were also investigated. This research builds upon previous research, utilising insights from several disciplines and various theoretical perspectives. The data was collected from a sample of 260 individual South African taxpayers by means of face-to-face interviews, based on a questionnaire, compiled from an extensive literature review. The scope of the study was limited as it focused only on natural taxpayers within the Tshwane metropolitan area (which includes Pretoria, the capital city of South Africa) in Gauteng, as the purpose was not to generalise conclusions to the entire South African population. It was found that tax compliance may depend upon several factors, other than deterrence, and that the perceptions of individual South African taxpayers are likely to be influenced by these factors. One of the main recommendations of the study is the need for comprehensive, widely based communication and education of taxpayers and potential taxpayers by the South African Revenue Service

Ochberg v CIR: No “benefit” to the benefactor

This article analyses the South African case of Ochberg v CIR, which dealt with the question whether shares issued by a company to Ochberg, who was, for all intents and purposes, the sole shareholder, in consideration for services rendered and an asset provided to the company, constituted "income" in terms of the definition of "gross income" in section 7(1) of the Income Tax Act No. 40 of 1925 (as it then applied). Ochberg's contention was that he had received no benefit from the additional shares issued as the value of all the shares issued had been the same both before and after the issue of the shares. Accordingly, there had been no increase in his wealth and thus no income had been received. The majority decision (two of the five judges dissenting) of the Appellate Division of the Supreme Court held that the shares were "income" and had to be valued at their nominal value. The article first provides a glimpse into the life of Isaac Ochberg, who was a substantial benefactor to charitable causes. It then presents a thematic analysis of the four separate judgments set down in the case, and finally, discusses certain tax principles arising from the judgments. In conclusion, the article considers to what extent Ochberg benefited from the transaction in terms of the Haig-Simons model of taxation and the economic reality of the transaction. The lasting value of the decision is demonstrated with reference to citations of Ochberg v CIR in a number of more recent landmark cases