Perceptions of taxation : a comparative study of different population groups 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. Although the perceptions of previously disadvantaged groups in South Africa regarding taxation have been researched, this study extends prior research by investigating and comparing taxpayers’ perceptions amongst the four major South African population groups (that is, Black/African, Indian, Coloured and White). This is the main objective of this thesis. This study specifically aimed to determine 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. The significance of this study is emphasised, in that it builds upon previous research, utilizing insights from several disciplines and various theoretical perspectives. The data for this study was collected from a sample of 260 South African taxpayers by meansof 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. A further limitation of the study was that it focused on natural persons only; corporate taxpayers were excluded. Future research could extend this study by verifying the findings in other areas, amongst other population groups and corporate taxpayers. This research concluded that tax compliance may depend upon several factors, other than deterrence, and that the perceptions of 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 Services. CopyrightThesis (DCom (Accounting Sciences))--University of Pretoria, 2008.Taxationunrestricte

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

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

The hand that rocks the cradle : the African youth's perceptions on taxation

People have become increasingly helpless and confused about the impact of taxation on their daily lives. Many people consider a great deal of the money levied on taxation to be spent unwisely, and that the manner in which taxes is collected is also often unwise. However, there seems to be little that they – or even that governments can do – to control processes which have acquired their own momentum. This paper focuses on the African youth of South Africa, as they are the future voters and taxpayers of the country. The South African youth of today are aware that they are truly a unique generation of South Africans. Never before have so many young people had as many opportunities for interchange, for learning, and for dreaming of a better future. Drawing from the theorising of Schwartz (1972), Flanigan (1978) and Withrow, Long and Marx (1999) on the relevancy of education, the primary aim of this research paper was to provide an overview of the perception on taxation under previously disadvantaged black South African learners and to identify whether a need for more tax education and training exists. From this paper it is clear that South African learners are eager to learn more about taxation. In addition, it is submitted that there is no better tool for a government to strengthen the fragile fabric of a young democracy than to provide the future electorate of that country with knowledge on taxes – the means by which that same government is funded

A survey of the perceptions of previously disadvantaged South Africans on taxation

This article investigates the perceptions prevalent amongst previously disadvantaged South Africans on taxation. A need identified in this study is that of more knowledge regarding tax systems, the implementation thereof and the utilization of revenue received from taxation. The South African Government has the opportunity to empower previously disadvantaged South Africans, by providing information sessions to them regarding taxation. Another important point proven from this study is that previously disadvantaged South Africans see the financing of pensions, education, health services, road maintenance and welfare as the main significant areas that should be funded by (their) tax money. The electorate was made the promise that these mentioned areas of social welfare would be addressed, prior to the general elections in 1994. The majority of South Africans is still anxiously awaiting what was promised to them almost a decade ago

Attitudes of South African taxpayers towards taxation : a pilot study

The South African Minister of Finance, Trevor Manuel stated that the obligation to pay one’s fair share of taxes as and when they fall due is part of the new morality which democratic governance must inculcate in every South African. He accepted that tax evasion and fraud are among the most insidious forms of criminality that plague the South African society and that millions of Rand are diverted everyday from the fiscus by tax criminals. Limited research on taxpayers’ perceptions has been performed in South Africa. It is of utmost importance to determine taxpayers’ perceptions towards taxation in order, not only to influence Government policy regarding taxation but also to enable Government to market itself and its services more effectively to the general public. This paper reports the results of a pilot study of a larger research project carried out amongst South African taxpayers by means of personal, face-to-face interviews with a structured and semi-structured questionnaire administered at respondents’ homes. Although the majority of the respondents did not feel it is unfair to pay tax, all of the respondents were of the opinion that waste and corruption in government is high. In addition, the majority of the respondents felt that taxes is used by government for meaningless purposes and that the government does not provide enough information about how they utilise taxpayers’ money. The respondents, therefore, felt that tax rates should be reduced. One of the most effective tools for making people more positive is to empower them with knowledge. It is submitted that there is no better tool for government to positively influence the taxpayers of a democracy than to provide them with knowledge on how taxpayers’ money is utilised

The tax deductibility of donations, with specific reference to donations of property made in kind to public benefit organisations

Section 18A of the Income Tax Act (Act 58 of 1962), as amended by the Revenue Laws Amendment Act (Act 45 of 2003) entitles a taxpayer (an individual or a legal entity, including a trust) to deduct annual donations to certain public benefit organisations, not exceeding 5% of taxable income. The question arises whether the same tax deduction applies when a taxpayer decides to make a donation in cash as opposed to a donation of property in kind. The aim of this paper is to compare the effect on a taxpayer's taxable income of making a cash donation compared with a donation of property in kind. It appears that the tax deduction in respect of donations is greater when a taxpayer decides to donate an amount in cash rather than a donation of property in kind. The paper shows that, under current legislation, a donation of property made in kind can be structured in such a way that it will provide a taxpayer with an identical tax deduction. It is hoped that current legislation pertaining to the deduction of a donation of property in kind will be amended soon, as the provisions are clearly inequitable in relation to a taxpayer who wishes to donate property in kind rather than a cash amount to a public benefit organisation

A note : study abroad programs : a potential key to successful accounting and management education in a global world

The continuing globalization of business underscores the importance of educating students to develop a broad worldview. This exploratory study attempts to provide educators with some insight into the usefulness of a short-term study abroad program. An existing short-term study abroad program undertaken by students from a first world country (United States of America) to a developing country (South Africa) was used as a basis for conducting the study. It became evident during the study that the mere idea of studying abroad served to initiate research into another culture. In addition, the participants believed that a visit to another country provides better insight into that country. This study argues that it is possible for a study abroad program to be used as an important educational tool for improving accounting and management education in a dynamic global world. Attending a study abroad program helps students gain international experience and intercultural skills, which are key factors in successful globalization and management

A Note: Study abroad programs: A potential key to successful accounting and management education in a global world

The continuing globalization of business underscores the importance of educating students to develop a broad worldview. This exploratory study attempts to provide educators with some insight into the usefulness of a short-term study abroad program. An existing short-term study abroad program undertaken by students from a first world country (United States of America) to a developing country (South Africa) was used as a basis for conducting the study. It became evident during the study that the mere idea of studying abroad served to initiate research into another culture. In addition, the participants believed that a visit to another country provides better insight into that country. This study argues that it is possible for a study abroad program to be used as an important educational tool for improving accounting and management education in a dynamic global world. Attending a study abroad program helps students gain international experience and intercultural skills, which are key factors in successful globalization and management

The effect on taxpayers of new tax legislation regarding foreign exchange transactions

Numerous problems have been encountered with the practical application of the new taxation legislation relating to foreign currency transactions. The purpose of this paper is to analyse the amendments relating to foreign exchange transactions and to illustrate, by using examples, the far reaching effect of these amendments on the taxpayer, as well as the effect on the financial statements for accounting purposes. The paper concentrates on the amendments to section 25D and 24I (with specific reference to section 24I(11)) contained in the Second Revenue Laws Amendment Act (Act 74 of 2002) (promulgated on 13 December 2002) and the Revenue Laws Amendment Act (Act 45 of 2003) (promulgated on 22 December 2003). The paper continues to also illustrate the interaction and the effect of the Eighth Schedule on sections 25D and 24I