Corporate taxes and the taxation of dividends
- Authors: Williams, John Mark
- Date: 1997
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:890 , http://hdl.handle.net/10962/d1001644
- Description: The classical system of taxation, whereby companies are taxed without a deduction for dividends paid and shareholders are taxed on their dividend receipts, results in double taxation of dividends. Split rate and imputation systems have been developed in an attempt to mitigate the effects of double taxation of dividends. Double taxation of dividends and differences between corporate and maximum individual marginal tax rates result in corporate tax systems lacking neutrality. Distortions arise between organisational forms, between debt and equity financing and between the retention and distribution of profits. Various methods of integrating corporate and individual taxes have been advocated to overcome the lack of neutrality caused by corporate taxes. Following the introduction of the South African Income Tax Act in 1914, a number of taxes relating to dividends have existed. These have included a Dividend Tax, Non-resident Shareholder's Tax, Undistributed Profits Tax and Secondary Tax on Companies, hereafter referred to as STC. STC is a tax on net dividends declared and results in distributed income being taxed at higher rates than retained income. Despite the implementation of group relief provisions, STC results in an inhibition on the reinvestment of profits within the context of a group of companies. It is also a major cause of the lack of neutrality of the South African corporate tax system. As a result of the lack of neutrality and inhibition of group reinvestment caused by STC, a full imputation system is suggested as an alternative to replace STC.
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- Date Issued: 1997
Does primary resource-based industrialisation offer an escape from underdevelopment?
- Authors: Ali, Fatimah
- Date: 2006
- Subjects: Comparative advantage (International trade) , Exports -- Africa, West , Exports -- Mauritius , Exports -- South Africa , Foreign trade promotion -- Mauritius , International trade , Primary commodities -- Africa , Human capital -- Economic aspects -- Africa , Natural resources -- Africa , Africa -- Commerce
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1018 , http://hdl.handle.net/10962/d1002753 , Comparative advantage (International trade) , Exports -- Africa, West , Exports -- Mauritius , Exports -- South Africa , Foreign trade promotion -- Mauritius , International trade , Primary commodities -- Africa , Human capital -- Economic aspects -- Africa , Natural resources -- Africa , Africa -- Commerce
- Description: It is commonly believed about sub-Saharan Africa (SSA) that the region has a comparative advantage in primary resources as reflected by its high share of primary exports to total exports. In acknowledging the region's comparative advantage, the study tries to put the determinants from the Wood and Mayer (1998, (999) (W-M) Heckscher-Ohlin based model in the context of two relatively diversified countries (South Africa and Mauritius) and two commodity-export-dependent countries of sub-Saharan Africa (Nigeria and Cô̌̌te d'Ivoire). The study finds that the skill and land resource measures used in the W -M (1998, 1999) thesis do not explain why Nigeria, having a similar level of skill per worker ratio to South Africa, has not diversified. Further, Mauritius having relatively the highest skill per land ratio specialises in low-skill textiles and clothing, while South Africa specialises in the more human capital-intensive "other manufactures" group. The other measure, a low land per worker ratio that explains Mauritius' relatively higher share of manufacturing exports, also fails to apply to Nigeria. The thesis thus concludes that the W-M land and skill measures could only be rough proxies in determining comparative advantage in manufacturing exports. However, employing the Dutch disease hypothesis recognises the potential of land abundance as a natural resource, namely minerals in South Africa, oil in Nigeria, and cocoa in Cǒ̌te d'Ivoire. The Dutch disease is a dynamic process of structural economic and political development that will permit an understanding of why natural resource abundant countries do not have a comparative advantage in manufacturing, at least in the short to medium term. The study therefore investigates commodity dependence and the Dutch disease effects to examine whether primary resource- based industrialisation offers an escape from underdevelopment. It establishes that South Africa, a mineral resource rich country, diversified based on a broad mineral-energy-complex (MEC) reinforcing the notion that land abundant countries will first invest in capital- intensive primary resource processing. However, the thesis concludes that in Nigeria and Cǒ̌te d'Ivoire where external shocks are more predominant probably because of single commodity export reliance, the manufacturing sector lags behind more due to resource and spending effects that a natural resource boom generates in these economies.
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- Date Issued: 2006