The praxis of reasonability and onus of proof in tax administration in South Africa
- Authors: Mostert, Tarita
- Date: 2018
- Subjects: Tax administration and procedure -- South Africa , Taxation -- Law and legislation -- South Africa Internal revenue law -- South Africa
- Language: English
- Type: Thesis , Masters , LLM
- Identifier: http://hdl.handle.net/10948/22802 , vital:30091
- Description: The legal principles of reasonableness and the burden of proof date back to ancient times. The first codification of these principles occurred in Roman Law. The Tax Administration Act incorporates these principles in various sections. The purpose of this treatise as formulated in Chapter 1 was to determine whether there is a close connection (in practice) between tax administration (within the context of the Tax Administration Act) and the principles of reasonableness and the burden of proof. SARS acknowledges that the principles of best international practice in tax administration must be taken into account1. These principles include equity, fairness, certainty, simplicity, efficiency and effectiveness. Effective tax administration entails that a balance must be struck between the rights and obligations of the taxpayers and those of SARS2. It is important that the taxpayers and SARS strive to communicate with one another in an efficient and effective manner in order to resolve disputes between them. The treatise followed a logical approach. This entailed that the general interpretation of aspects had to be followed by the tax specific interpretation of the aspects. The general interpretation included an analysis of case law as well as research into the origins of the principles of reasonableness and the burden of proof. Reasonableness and the burden of proof do not require perfection. It is important, however, that assertions must be accompanied by evidence. The quality and quantity of evidence submitted is dependent upon the relevant facts and circumstances of a matter. The facts and circumstances of a matter also constitute determining factors in 1 Draft Explanatory Memorandum on the Draft Tax Administration Bill, 2009 at 1 in 2.5. 2 Ibid in 2.1.evaluating whether the principles of reasonableness and the burden of proof have been applied. The treatise concludes that increased efforts are necessary in order to ensure that the principles of reasonableness and the burden of proof are adhered to in tax administration. This obligation is not limited to SARS but also includes taxpayers and tax practitioners. This is closely linked to effective and efficient communication.
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- Date Issued: 2018
An analysis, from a South African case law perspective, of the deductibility of losses due to embezzlement, fraud, theft, damages and compensation
- Authors: Jachi, Adelaide Gamuchirai
- Date: 2018
- Subjects: South Africa. Income Tax Act, 1962 , Tax deductions -- South Africa , Taxation -- Law and legislation -- South Africa , Tax courts -- South Africa , Tax administration and procedure -- South Africa , Tax accounting -- South Africa , Income tax deductions for losses -- South Africa
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/60855 , vital:27846
- Description: When calculating the income tax payable for a year of assessment, a taxpayer deducts from his or her or its income, allowable deductions in terms of the preamble to section 11 and section 11(a) as read with section 23(g) of the Income Tax Act, 58 of 1962. Amongst the expenditure and losses incurred by a taxpayer during a year of assessment, a claim may be sought for the deduction of losses incurred due to embezzlement, fraud and theft as well as damages and compensation. The requirements of the preamble and section 11(a) include the requirement that expenditure and losses must be incurred “in the production of the income”. Losses incurred due to defalcations, as well as expenditure on damages and compensation must satisfy this requirement to be allowed as deductions. The objective of the research was to analyse the judicial decisions dealing with “in the production of the income” in granting a deduction for income tax purposes in cases dealing with embezzlement, fraud and theft, and damages and compensation, to establish why the courts grant or disallow the deduction of expenditure and losses. A doctrinal research methodology was applied to the research. The provisions of the Income Tax Act, relevant case law relating to embezzlement, fraud and theft, and damages and compensation, and the contributions of the revenue authority and tax experts in articles of accredited journals, textbooks and other writings were analysed. The major conclusions drawn from the research were that losses due to defalcations are regarded as having been incurred “in the production of the income” if the taxpayer discharges the onus of proof that the risk of the act leading to misappropriation is an incidental risk of the business. Expenditure on damages and compensation is deductible provided the expense is attached to the performance of a business operation bona fide performed for the purpose of earning income and the expense is so closely connected with the business operation as to be regarded as part of the cost of performing it. Where negligence is attached to an expense or loss, the South African courts have held that negligence does not increase the likelihood of disallowing an expense or loss as not having been incurred “in the production of the income”.
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- Date Issued: 2018