Chief executive officer compensation and the effect on company performance in a South African context
- Authors: Bradley, Samuel
- Date: 2012
- Subjects: Chief executive officers -- Salaries, etc. -- South Africa , Compensation management -- South Africa , Wage surveys -- South Africa , Organizational effectiveness -- Evaluation
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:883 , http://hdl.handle.net/10962/d1001637 , Chief executive officers -- Salaries, etc. -- South Africa , Compensation management -- South Africa , Wage surveys -- South Africa , Organizational effectiveness -- Evaluation
- Description: The goal of this research was to determine, in a South African context, whether there is any correlation between chief executive officer compensation and the performance of the company. For the purposes of the research , the compensation of chief executive officers was broken down into three components: salary, bonus and "other" remuneration, while company performance was measured on return on equity, return on assets and earnings per share figures. Studies on this topic have been carried out in other countries, most notably in the United States of America and the United Kingdom. It appears that no research of a similar nature has been carried out in South Africa. Data in respect of the forty largest listed companies in South Africa were collected over a period of five years. The econometric models used for the research were based on models identified in the literature study. The data were then analysed for evidence of a correlation between chief executive officer compensation and the performance of the company. The results of this study indicate that there is no linear relationship between chief executive officer compensation and company performance variables. The econometric models did, however, show correlations between certain variables, taking into account the other predictor variables in the model. Evidence of correlations between age and experience and compensation was also found , which may present potential avenues of research to scholars in the future.
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- Date Issued: 2012
A South African perspective on the tax implications of virtual asset accumulation and transactions stemming from persistent virtual worlds
- Authors: Haupt, Alexander
- Date: 2012
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:884 , http://hdl.handle.net/10962/d1001638
- Description: Massively multiplayer online role-playing games are growing in popularity with millions of people participating in these persistent online environments on a daily basis. Accompanying the ever-increasing subscription numbers is an increase in real money trade transactions stemming from these game worlds. The research question to be addressed in this thesis is whether transactions stemming from virtual worlds have real-world taxation consequences. The goal of this research is to determine the taxability of virtual assets obtained in structured as well as unstructured virtual environments and to attempt to establish the differences between capital and revenue receipts in these virtual realms, taking into account the nature of a receipt. The general deduction formula is applied to establish the deductibility of expenditure incurred whilst participating in these virtual environments. Sundry matters such as Value-Added Tax, donations tax, the withholding tax on gambling gains and tax avoidance will also be addressed. The methodology adopted for the research could best be described as interpretative, aimed at analysing and interpreting the relationship between real world taxes and persistent virtual worlds and the transactions that stem from participation therein. The research is based purely on documentary evidence. After applying relevant tax legislation to virtual economies it became evident that merely because virtual assets only exist in virtual reality does not necessarily preclude them real world tax consequences. It was concluded, however, that it is not practical for the South African Revenue Service to monitor all virtual world transactions or for participant taxpayers to calculate the real world value of each and every asset acquired in-world. As a result, it was concluded that real world tax consequences should only be applied in situations where participants actually convert their virtual assets into real world currency.
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- Date Issued: 2012
An analysis of the impact of tax changes between 1996 and 2012 on the tax burden of individuals in South Africa
- Authors: Krug, Lee
- Date: 2012
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:885 , http://hdl.handle.net/10962/d1001639
- Description: The objective of the research was to determine whether the changes made to the Income Tax Act, 58 of 1962 between 1996 and 2012, in respect of fringe benefits, allowances, deductions, tax tables and rebates, where these changes apply to individuals, have resulted in relieving the tax burden placed on individuals in South Africa. The research was conducted by means of a critical analysis of documentary data with specific reference to the Income Tax Act, annual amendments to the Income Tax Act, statistics relating to tax collections, the National Budget and the Annual Budget Speeches as tabled by the Minister of Finance. These sources were utilised to analyse the amendments to the Act that have taken place over the last sixteen years, where they impact on the tax liability of an individual. A hypothetical example incorporating all the variables identified in the analysis of the tax amendments was used to provide a detailed analysis of the tax payable by an individual on an inflation-adjusted year-on-year basis. The research found that, whilst personal income tax is still the largest contributor to the national budget of South Africa, its contribution has decreased from 40.2 percent in 1996 to 34.3 percent in 2010. This decrease is partly attributable to the extensive tax reforms undertaken by Government with respect to the tax tables, resulting in a reduction in the marginal tax rates and increased tax rebates which had the effect that the individual taxpayer (as illustrated in the hypothetical example) experienced a decrease in the average rate of tax. In contrast to this, the increase in the taxable income of the hypothetical taxpayer exceeded the average rate of inflation over the period. Furthermore, the actual revenue collected by the government from personal income tax has increased by approximately eleven percent per annum, which far exceeds the average inflation rate of 6.23 percent. The research indicated that this could be the result of the increase in the taxable value of fringe benefits, specifically medical aid contributions and company cars, as well as the inclusion of the full amount of allowances in taxable income and the limits placed on the deductions an individual may claim. The result is a broadening of the tax base of the individual taxpayer. Therefore, although the government may have achieved its goal of a fairer tax system, the amendments made to fringe benefits, allowances and deductions have resulted in an increase in the average taxable income of individuals.
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- Date Issued: 2012
The valuation of amounts for the purpose of inclusion in gross income
- Authors: Spearman, Tarryn Leigh
- Date: 2012
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:887 , http://hdl.handle.net/10962/d1001641
- Description: The present research investigates the valuation of amounts for the purpose of inclusion in gross income. Because the gross income definition in section 1 of the Income Tax Act includes "amounts in cash or otherwise", valuations are often required in order to establish a value in money terms for amounts received or accrued in a form otherwise than in cash. The basis on which these valuations are made can vary and the courts have frequently been called upon to decide on the correct method of valuation. There has been an ongoing debate in the courts as to whether a strict objective approach or a more flexible subjective approach should be adopted when valuing an amount in a form other than cash, which was finally settled in the decision by the Supreme Court of Appeal in CIR v Brummeria Renaissance (Pty) Ltd, which held that an objective approach must be followed. The present research will demonstrate how the strict rule of interpretation tends to result in purely objective valuations as it requires that the ordinary grammatical meaning of words be applied and does not allow the court to consider the purpose of the legislation or introduce any subjectivity based on the circumstances of each individual taxpayer and the facts of each particular case, which a purposive interpretation approach does. The purposive approach to interpretation is therefore more closely aligned with the subjective approach to valuation. Both the objective and subjective approaches to valuation have advantages and disadvantages, which are addressed in the research. The need for certainty in taxation was articulated as early as 1776 by Adam Smith in his Wealth of Nations. The objective approach appears to create a level of consistency as all income received by a taxpayer is effectively taxed as if received by a third party in an arm’s length transaction. The approach has led to unfair decisions at odds with economic reality and generally accepted accounting principles, which could be challenged on the basis of a lack of equity and fairness as required by the Constitution of the Republic of South Africa. The research demonstrates that an objective method of valuation is neither fully objective nor appropriate in certain circumstances, while a subjective approach may be more appropriate as it ensures that each taxpayer’s individual rights are protected. Although the subjective approach successfully addresses the issue of fairness, it threatens to introduce an unacceptable level of inconsistency and is, in reality, not always administratively feasible. The present research concludes that a trade-off between fairness and consistency is often necessary.
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- Date Issued: 2012
An analysis of the financing mechanisms proposed for funding national health insurance in South Africa
- Authors: Stevens, Nicol Susan
- Date: 2012
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:888 , http://hdl.handle.net/10962/d1001642
- Description: In the 2011 Budget Speech, the Minister of Finance announced that South Africa would be introducing National Health Insurance. The Minister described the financing mechanisms under consideration for funding National Health Insurance. The Minister also referred to eight countries, namely Japan, South Korea, Taiwan, Chile, Colombia, Mexico, Thailand and Vietnam as examples of countries which had successfully implemented universal health coverage. These countries were selected for the purpose of the present research. The goal of this study was to analyse the health care financing mechanisms under consideration in South Africa to determine if they were in line with international trends and "best practice" in relation to South Africa's economic profile. To determine whether the economic situation in South Africa is comparable to the eight countries selected for the research, a high-level comparison was made of the economic profile of South Africa and the eight countries, based on certain demographic, macro-economic, health expenditure and health status indicators. The health care financing mechanisms used in the eight countries was also analysed. International trends suggested that health care should be financed primarily through pre-payment systems, that financing mechanisms should preferably be progressive in nature and that a large share of funding should be from government sources (albeit shared between general tax revenue and specific health care contributions). The financing mechanisms under consideration in South Africa reflect these norms. The health systems in the eight countries analysed all exhibited elements of "good performance" and also complied, to a large extent, with international trends, but the frnancing models used for funding health care in the eight countries were country-specific and could therefore not be compared directly or used to recommend a system for South Africa. Areas not addressed by this thesis include the implications of a centralised healthcare system, the implications of a single-payer system, the benefit package to be offered and its cost implications, the role of private healthcare providers and how the significant human resource scarcity and infrastructure backlogs will be addressed.
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- Date Issued: 2012