FRK 122
CHAPTER 7: TAXATION:
Lecture 1: DIFFERENT TYPES OF TAX
INTRODUCTION AND BACKGROUND TO SARS:
Tax is what you “pay to be part of civilization”.
SARS established by legislation: The South African Revenue Service Act 34 of
1997
Administrative autonomous organ of the state:
- outside public service
- within public administration
Main functions:
- Collect & administer all national taxes, duties and levies.
- Collect other revenues.
- Protect against illegal importation & exportation of goods & services.
- Facilitate trade.
- Advise the Minister of Finance on all revenue related matters.
Mandate includes:
- supporting the economy
- providing the revenue needed to build a democracy.
Deliver a customs service that:
- maximises revenue collection.
- protects South Africa’s borders.
- facilitates trade.
,There are many types of tax.
Income Tax = Income tax is levied on all income and profit received by a
taxpayer
Capital Gains Tax (CGT) = CGT is part of income tax. It is triggered when
you make a profit from selling something you own (an asset)
Value Added Tax (VAT) = VAT is an indirect tax based on the consumption
of goods and services
Donations Tax = Tax payable on value of property disposed of by a
resident by means of a donation
Estate Duties = Estate duty is levied on the nett estate of a deceased
individual
Companies Tax = A South African resident company is subject to
corporate income tax on its worldwide income, irrespective of the source
of the income
[Dividend tax is a withholding tax and replaced Secondary Tax on Companies;
Companies withhold tax from the amount of dividends paid out to
shareholders]
, 1. INCOME TAX:
Income tax is levied on all income and profit received by a taxpayer
Taxpayers include: Individuals; Companies; and Trusts.
Main source of income for Government
Imposed by Tax Act 58 of 1962
Any form of employment income = registration with SARS
Because it is impractical to expect taxpayers to pay a large sum of tax once a
year = Pay As You Earn (PAYE) AND Provisional Tax
PAYE:
- Employers must deduct PAYE from the salaries, wages & bonuses of its
employees.
- PAYE paid over to SARS monthly by employers.
- Employers must issue Employees with Tax Certificate = IRP5/IT3(a)
Provisional Tax:
- For taxpayers who earn income other than salaries & wages
CHAPTER 7: TAXATION:
Lecture 1: DIFFERENT TYPES OF TAX
INTRODUCTION AND BACKGROUND TO SARS:
Tax is what you “pay to be part of civilization”.
SARS established by legislation: The South African Revenue Service Act 34 of
1997
Administrative autonomous organ of the state:
- outside public service
- within public administration
Main functions:
- Collect & administer all national taxes, duties and levies.
- Collect other revenues.
- Protect against illegal importation & exportation of goods & services.
- Facilitate trade.
- Advise the Minister of Finance on all revenue related matters.
Mandate includes:
- supporting the economy
- providing the revenue needed to build a democracy.
Deliver a customs service that:
- maximises revenue collection.
- protects South Africa’s borders.
- facilitates trade.
,There are many types of tax.
Income Tax = Income tax is levied on all income and profit received by a
taxpayer
Capital Gains Tax (CGT) = CGT is part of income tax. It is triggered when
you make a profit from selling something you own (an asset)
Value Added Tax (VAT) = VAT is an indirect tax based on the consumption
of goods and services
Donations Tax = Tax payable on value of property disposed of by a
resident by means of a donation
Estate Duties = Estate duty is levied on the nett estate of a deceased
individual
Companies Tax = A South African resident company is subject to
corporate income tax on its worldwide income, irrespective of the source
of the income
[Dividend tax is a withholding tax and replaced Secondary Tax on Companies;
Companies withhold tax from the amount of dividends paid out to
shareholders]
, 1. INCOME TAX:
Income tax is levied on all income and profit received by a taxpayer
Taxpayers include: Individuals; Companies; and Trusts.
Main source of income for Government
Imposed by Tax Act 58 of 1962
Any form of employment income = registration with SARS
Because it is impractical to expect taxpayers to pay a large sum of tax once a
year = Pay As You Earn (PAYE) AND Provisional Tax
PAYE:
- Employers must deduct PAYE from the salaries, wages & bonuses of its
employees.
- PAYE paid over to SARS monthly by employers.
- Employers must issue Employees with Tax Certificate = IRP5/IT3(a)
Provisional Tax:
- For taxpayers who earn income other than salaries & wages
