,Taxes levied on: PROPORTIONAL TAX Fixed rate on amount of income earned
INCOME
Calculate amount of tax by the person
• Tax on income earned PROGRESSIVE TAX income. Higher income = higher tax rate
• Example: Income tax
• Method: Proportional Tax
REGRESSIVE TAX Higher income = tax rate decreases
CONSUMPTION
• Tax on the sale or use of goods or services
• Example: VAT, excise duty and domestic
consumption
• Method: Progressive Tax
Impact and incidence of tax falls on the
WEALTH same person
• Tax on ownership of assets or capital gains from the DIRECT TAX • Income tax
sale of property • Capital gains tax
• Example: Capital gains tax, estate duty and
donations tax Seller bears impact of tax, consumer pays
• Method: Progressive Tax INDIRECT TAX the tax
OTHER
• Tax on income earned
• Example: Transfer duty, fuel levy
, The subjects of every state ought to contribute,
Equity almost in proportion to their abilities, towards
the support of the government.
Certainty The tax that every individual is bound to pay
should be certain and not arbitrary.
Every tax should be levied at the time or in the
Convenience manner most convenient for the contributor to
pay it.
Every tax should be such that the contributor pays
Economy the minimal additional cost for administration and
in submission costs beyond its actual tax
, The budget is the process that government follows to determine how
much money it needs and therefore how much tax must be collected.
MEDIUM-TERM The government’s budgeting process starts with the preparation of the medium-term expenditure framework document.
EXPENDITURE This document sets out the expected expenditure of the different government departments and the expected revenue
FRAMEWORK for the next three years.
The expenditure framework also seeks to implement certain broad economic policy objectives.
These macro-economic policies include
• the maintenance of full-time employment;
• the achievement of a high rate of economic growth;
• the maintenance of price stability (that is to say the prevention of inflation); and
• the maintenance of external equilibrium (that is to say the maintenance of a favourable balance of payments and a
stable exchange rate).
1st Measure to achieve the macro-economic goals = FISCAL POLICY
• Fiscal policy influences the total demand in the household’s economy.
2nd Measure to achieve the macro-economic goals = MONETARY POLICY
• Monetary policy is the action by the monetary authority aimed at influencing the use of money and credit
, The budget is the process that government follows to determine how
much money it needs and therefore how much tax must be collected.
THE NATIONAL 1st part of the speech
BUDGET • Short review of the economic, political, social and other circumstances that have an effect on the budget proposals
2nd part of the speech
• Most important items of estimated state of expenditure
3rd part of the speech
• Budget documents
• the estimate of expenditure to be defrayed from the National Revenue Fund;
• the estimate of income to be received;
• the statistical/economic survey;
• the tax proposals;
• comparative figures of income; and
• any other relevant documents.
INCOME
Calculate amount of tax by the person
• Tax on income earned PROGRESSIVE TAX income. Higher income = higher tax rate
• Example: Income tax
• Method: Proportional Tax
REGRESSIVE TAX Higher income = tax rate decreases
CONSUMPTION
• Tax on the sale or use of goods or services
• Example: VAT, excise duty and domestic
consumption
• Method: Progressive Tax
Impact and incidence of tax falls on the
WEALTH same person
• Tax on ownership of assets or capital gains from the DIRECT TAX • Income tax
sale of property • Capital gains tax
• Example: Capital gains tax, estate duty and
donations tax Seller bears impact of tax, consumer pays
• Method: Progressive Tax INDIRECT TAX the tax
OTHER
• Tax on income earned
• Example: Transfer duty, fuel levy
, The subjects of every state ought to contribute,
Equity almost in proportion to their abilities, towards
the support of the government.
Certainty The tax that every individual is bound to pay
should be certain and not arbitrary.
Every tax should be levied at the time or in the
Convenience manner most convenient for the contributor to
pay it.
Every tax should be such that the contributor pays
Economy the minimal additional cost for administration and
in submission costs beyond its actual tax
, The budget is the process that government follows to determine how
much money it needs and therefore how much tax must be collected.
MEDIUM-TERM The government’s budgeting process starts with the preparation of the medium-term expenditure framework document.
EXPENDITURE This document sets out the expected expenditure of the different government departments and the expected revenue
FRAMEWORK for the next three years.
The expenditure framework also seeks to implement certain broad economic policy objectives.
These macro-economic policies include
• the maintenance of full-time employment;
• the achievement of a high rate of economic growth;
• the maintenance of price stability (that is to say the prevention of inflation); and
• the maintenance of external equilibrium (that is to say the maintenance of a favourable balance of payments and a
stable exchange rate).
1st Measure to achieve the macro-economic goals = FISCAL POLICY
• Fiscal policy influences the total demand in the household’s economy.
2nd Measure to achieve the macro-economic goals = MONETARY POLICY
• Monetary policy is the action by the monetary authority aimed at influencing the use of money and credit
, The budget is the process that government follows to determine how
much money it needs and therefore how much tax must be collected.
THE NATIONAL 1st part of the speech
BUDGET • Short review of the economic, political, social and other circumstances that have an effect on the budget proposals
2nd part of the speech
• Most important items of estimated state of expenditure
3rd part of the speech
• Budget documents
• the estimate of expenditure to be defrayed from the National Revenue Fund;
• the estimate of income to be received;
• the statistical/economic survey;
• the tax proposals;
• comparative figures of income; and
• any other relevant documents.
