The relationship between financial development and manufacturing sector growth: evidence from Southern African Customs Union countries
- Authors: Moshabesha, Mosili
- Date: 2011
- Subjects: Economic development -- Case studies -- Africa, Southern Entrepreneurship -- Case studies -- Africa, Southern Southern African Customs Union
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:990 , http://hdl.handle.net/10962/d1002725
- Description: Extensive research has been done on the relationship between financial development (FD) and growth (with the main focus on economic growth). Theoretical models and most of the conclusions reached stipulate that the development of a financial system is one of the essential ingredients for economic growth. A developed financial system is able to provide financial services efficiently to the real sector. This study examines the relationship between FD and manufacturing sector growth of the SACU countries. The study first reviews the theoretical and empirical literature of FD and growth (economic and manufacturing sector). This gives a full understanding of the topic before attempting to empirically study it. It also helps in the selection process of the model and variables to be employed in the study. A balanced panel for four SACU countries, namely Botswana, Lesotho, RSA and Swaziland, for the period 1976 to 2008 was estimated using Zellner‟s Seemingly Unrelated Regression Estimation (SURE) method. Namibia was omitted because of limited data. The SURE model was selected because it performs better than ordinary least squares (OLS) estimation of individual equations in cases where the countries studied can be affected by similar external shocks because they are in the same economic region and also have country specific structural differences which could affect their economic growth. Two measures of FD were used: credit to the private sector provided by commercial banks (FIC) and the ratio of liquid liabilities of commercial banks to GDP (LL). Manufacturing sector growth was measured by manufacturing value added to GDP. The results of the relationship between manufacturing growth and FD were very weak across the countries. The model that used FIC performed better, there was a negative significant relationship found in RSA and Swaziland, while with the model that used LL, all the countries gave an insignificant relationship. The results for Swaziland were very consistent with the past findings of the relationship between FD and economic growth in the country (for example Aziakpono (2005a)). This may be because of the high share of the manufacturing sector in GDP. Theory suggests that a well-developed financial system will have a positive impact on growth, but this was not the case in RSA and Botswana, where in some cases FD had a negative impact on the growth of the sector. The analysis of the countries‟ manufacturing sector development shows that the sector plays an important role in the economies of the SACU countries, especially in terms of employment and exports. The coefficients of trade openness are generally positive, though not significant in some cases. The other control variables gave mixed results across the counties and across the models. Based on the findings, the countries have to develop strategies that will improve entrepreneurial skills. Also the financial development in the small SACU countries is essential in order for all the sectors in the economy to benefit from the financial sector and in turn increase economic growth.
- Full Text:
- Date Issued: 2011
- Authors: Moshabesha, Mosili
- Date: 2011
- Subjects: Economic development -- Case studies -- Africa, Southern Entrepreneurship -- Case studies -- Africa, Southern Southern African Customs Union
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:990 , http://hdl.handle.net/10962/d1002725
- Description: Extensive research has been done on the relationship between financial development (FD) and growth (with the main focus on economic growth). Theoretical models and most of the conclusions reached stipulate that the development of a financial system is one of the essential ingredients for economic growth. A developed financial system is able to provide financial services efficiently to the real sector. This study examines the relationship between FD and manufacturing sector growth of the SACU countries. The study first reviews the theoretical and empirical literature of FD and growth (economic and manufacturing sector). This gives a full understanding of the topic before attempting to empirically study it. It also helps in the selection process of the model and variables to be employed in the study. A balanced panel for four SACU countries, namely Botswana, Lesotho, RSA and Swaziland, for the period 1976 to 2008 was estimated using Zellner‟s Seemingly Unrelated Regression Estimation (SURE) method. Namibia was omitted because of limited data. The SURE model was selected because it performs better than ordinary least squares (OLS) estimation of individual equations in cases where the countries studied can be affected by similar external shocks because they are in the same economic region and also have country specific structural differences which could affect their economic growth. Two measures of FD were used: credit to the private sector provided by commercial banks (FIC) and the ratio of liquid liabilities of commercial banks to GDP (LL). Manufacturing sector growth was measured by manufacturing value added to GDP. The results of the relationship between manufacturing growth and FD were very weak across the countries. The model that used FIC performed better, there was a negative significant relationship found in RSA and Swaziland, while with the model that used LL, all the countries gave an insignificant relationship. The results for Swaziland were very consistent with the past findings of the relationship between FD and economic growth in the country (for example Aziakpono (2005a)). This may be because of the high share of the manufacturing sector in GDP. Theory suggests that a well-developed financial system will have a positive impact on growth, but this was not the case in RSA and Botswana, where in some cases FD had a negative impact on the growth of the sector. The analysis of the countries‟ manufacturing sector development shows that the sector plays an important role in the economies of the SACU countries, especially in terms of employment and exports. The coefficients of trade openness are generally positive, though not significant in some cases. The other control variables gave mixed results across the counties and across the models. Based on the findings, the countries have to develop strategies that will improve entrepreneurial skills. Also the financial development in the small SACU countries is essential in order for all the sectors in the economy to benefit from the financial sector and in turn increase economic growth.
- Full Text:
- Date Issued: 2011
Gains derived from illegal activities :an analysis of the taxation consequences
- Mtshawulana, Lungiswa Bukeka
- Authors: Mtshawulana, Lungiswa Bukeka
- Date: 2009
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:886 , http://hdl.handle.net/10962/d1001640
- Description: Income Tax in South Africa is levied in terms of the Income Tax Act 58 of 1962 on taxable income, which, by definition, is arrived at by deducting from "gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The Income Tax Act provides no guidance with regard to the taxation of illegal activities, except to prohibit the deduction of expenditure incurred in paying fines or in relation to corrupt activities, as defined. An analysis of the taxation of income derived from theft, fraud and prostitution and the deductibility of expenses relating to that income, is the question addressed in this thesis. In this thesis, an analysis was made of relevant case law in relation to the provisions of the Income Tax Act in an attempt to provide clarity. A brief comparison was also macie of American, United Kingdom and South African tax law. Similarities were found between the American, United Kingdom and South African tax regimes in relation to the taxation of income, but there appeared to be more certainty in America and the United Kingdom in relation to the deduction of expenses. The thesis concludes that recent case decisions have provided certainty in relation to income from illegal activities, but the tax status of the deduction of expenses remains uncertain.
- Full Text:
- Date Issued: 2009
- Authors: Mtshawulana, Lungiswa Bukeka
- Date: 2009
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:886 , http://hdl.handle.net/10962/d1001640
- Description: Income Tax in South Africa is levied in terms of the Income Tax Act 58 of 1962 on taxable income, which, by definition, is arrived at by deducting from "gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The Income Tax Act provides no guidance with regard to the taxation of illegal activities, except to prohibit the deduction of expenditure incurred in paying fines or in relation to corrupt activities, as defined. An analysis of the taxation of income derived from theft, fraud and prostitution and the deductibility of expenses relating to that income, is the question addressed in this thesis. In this thesis, an analysis was made of relevant case law in relation to the provisions of the Income Tax Act in an attempt to provide clarity. A brief comparison was also macie of American, United Kingdom and South African tax law. Similarities were found between the American, United Kingdom and South African tax regimes in relation to the taxation of income, but there appeared to be more certainty in America and the United Kingdom in relation to the deduction of expenses. The thesis concludes that recent case decisions have provided certainty in relation to income from illegal activities, but the tax status of the deduction of expenses remains uncertain.
- Full Text:
- Date Issued: 2009
The impact of oil price variability on the exchange rate in South Africa
- Authors: Ngonisa, Phillip
- Date: 2016
- Subjects: Foreign exchange -- South Africa -- Econometric models Petroleum products -- Prices -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8261 , vital:32108
- Description: Economic theory asserts that exchange rate is a critical variable in the performance of exports and the economy at large. Equally important are variables that affect the exchange rate. In particular, economies that rely on commodity exports are vulnerable to fluctuations in commodity prices. Price volatility of such commodities can lead to significant fluctuations in exchange rates, a phenomenon referred to as commodity currencies. South Africa‘s currency has fluctuated significantly since 1994. Anecdotal evidence suggests that commodity prices may have a significant effect. Of interest is fluctuations in the oil prices, which in themselves have fluctuated greatly over the same period. This study uses a GARCH(1.1) model to investigate the impact of oil price variability on the South African exchange rate by employing the monthly data for a period spanning from January 1994 to December 2014. The results show that oil price variability affects both the level and volatility of the exchange rate. Informal evidence suggests that sovereign credit ratings are an important factor affecting the South African rand. This is supported by the results of this study. Accordingly, both variables carry important information for markets and policy makers at large.
- Full Text:
- Date Issued: 2016
- Authors: Ngonisa, Phillip
- Date: 2016
- Subjects: Foreign exchange -- South Africa -- Econometric models Petroleum products -- Prices -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8261 , vital:32108
- Description: Economic theory asserts that exchange rate is a critical variable in the performance of exports and the economy at large. Equally important are variables that affect the exchange rate. In particular, economies that rely on commodity exports are vulnerable to fluctuations in commodity prices. Price volatility of such commodities can lead to significant fluctuations in exchange rates, a phenomenon referred to as commodity currencies. South Africa‘s currency has fluctuated significantly since 1994. Anecdotal evidence suggests that commodity prices may have a significant effect. Of interest is fluctuations in the oil prices, which in themselves have fluctuated greatly over the same period. This study uses a GARCH(1.1) model to investigate the impact of oil price variability on the South African exchange rate by employing the monthly data for a period spanning from January 1994 to December 2014. The results show that oil price variability affects both the level and volatility of the exchange rate. Informal evidence suggests that sovereign credit ratings are an important factor affecting the South African rand. This is supported by the results of this study. Accordingly, both variables carry important information for markets and policy makers at large.
- Full Text:
- Date Issued: 2016
A comparison between the South African "source rules" in relation to income tax and the "permanent establishment rules" as contained in double taxation agreements
- Authors: Fourie, Leonie
- Date: 2008
- Subjects: Income tax -- South Africa , Income tax -- Law and legislation -- South Africa , Double taxation -- South Africa , Business enterprises -- Taxation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:905 , http://hdl.handle.net/10962/d1008203
- Description: South Africa's right to tax the income of a non-resident is determined in terms of the South African "source rules" established by court decisions in relation to the imposition of tax in terms of the Income Tax Act. Unless a non-resident's income is captured by the South African "source rules" (on the basis that hi slits income is derived from a South African source), South Africa would have no right to tax such income, even if such non-resident creates a permanent establishment in South Africa by performing business activities within South Africa which could be considered essential (but not dominant) in nature. In such scenario the activities performed by the non-resident in South Africa may utilise the natural resources and the infrastructure of South Africa, but the South African fiscus would be deprived of the right to any tax revenues attributable to the income produced partly by such activities within South Africa. The South African "source rules" refer only to the main or dominant activities giving rise to the income for the purpose of determining the source of such income (and accordingly the right to tax such income). On the other hand, the "permanent establishment rules" as set out under the Organisation for Economic Cooperation and Development Model Tax Convention on Income and on Capital refer to all the taxpayer's essential business activities for the purpose of determining whether or not such activities create a pennanent establishment. The result of the narrow nature of the South African "source rules" is that, under certain circumstances, the South African fiscus would not necessarily be granted the right to tax all income produced partly within South Africa. The research demonstrated that incorporating the principles underlying the "pennanent establishment rules" into South African legislation would be a reasonable and logical solution to the problem of detennining the source of income. In so doing, the South African "source rules" would determine the source of income, and consequently South Africa's taxing rights, with reference to the essential business activities giving rise to such income. In such case South Africa would be afforded the right to tax the income of a non-resident in the event that it performs any of its essential business activities within South Africa, albeit not the dominant or main activities giving rise to the income.
- Full Text:
- Date Issued: 2008
- Authors: Fourie, Leonie
- Date: 2008
- Subjects: Income tax -- South Africa , Income tax -- Law and legislation -- South Africa , Double taxation -- South Africa , Business enterprises -- Taxation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:905 , http://hdl.handle.net/10962/d1008203
- Description: South Africa's right to tax the income of a non-resident is determined in terms of the South African "source rules" established by court decisions in relation to the imposition of tax in terms of the Income Tax Act. Unless a non-resident's income is captured by the South African "source rules" (on the basis that hi slits income is derived from a South African source), South Africa would have no right to tax such income, even if such non-resident creates a permanent establishment in South Africa by performing business activities within South Africa which could be considered essential (but not dominant) in nature. In such scenario the activities performed by the non-resident in South Africa may utilise the natural resources and the infrastructure of South Africa, but the South African fiscus would be deprived of the right to any tax revenues attributable to the income produced partly by such activities within South Africa. The South African "source rules" refer only to the main or dominant activities giving rise to the income for the purpose of determining the source of such income (and accordingly the right to tax such income). On the other hand, the "permanent establishment rules" as set out under the Organisation for Economic Cooperation and Development Model Tax Convention on Income and on Capital refer to all the taxpayer's essential business activities for the purpose of determining whether or not such activities create a pennanent establishment. The result of the narrow nature of the South African "source rules" is that, under certain circumstances, the South African fiscus would not necessarily be granted the right to tax all income produced partly within South Africa. The research demonstrated that incorporating the principles underlying the "pennanent establishment rules" into South African legislation would be a reasonable and logical solution to the problem of detennining the source of income. In so doing, the South African "source rules" would determine the source of income, and consequently South Africa's taxing rights, with reference to the essential business activities giving rise to such income. In such case South Africa would be afforded the right to tax the income of a non-resident in the event that it performs any of its essential business activities within South Africa, albeit not the dominant or main activities giving rise to the income.
- Full Text:
- Date Issued: 2008
A critical analysis of the practical man principle in Commissioner for Inland Revenue v Lever Brothers and Unilever Ltd
- Authors: Grenville, David Paul
- Date: 2014
- Subjects: Unilever (Firm) , South African Revenue Service , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa -- Cases , Income tax -- South Africa -- Cases , Business enterprises -- Taxation -- South Africa , Law -- South Africa -- Philosophy
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:909 , http://hdl.handle.net/10962/d1013238
- Description: This research studies the practical person principle as it was introduced in the case of Commissioner for Inland Revenue v Lever Brothers and Unilever Ltd 1946 AD 441. In its time the Lever Brothers case was a seminal judgment in South Africa’s tax jurisprudence and the practical person principle was a decisive criterion for the determination of source of income. The primary goal of this research was a critical analysis the practical man principle. This involved an analysis of the extent to which this principle requires judges to adopt a criterion that is too flexible for legitimate judicial decision-making. The extent to which the practical person principle creates a clash between a philosophical approach to law and an approach that is based on common sense or practicality was also debated. Finally, it was considered whether adopting a philosophical approach to determining the source of income could overcome the problems associated with the practical approach. A doctrinal methodology was applied to the documentary data consisting of the South African and Australian Income Tax Acts, South African and other case law, historical records and the writings of scholars. From the critical analysis of the practical person principle it was concluded that the anthropomorphised form of the principle gives rise to several problems that may be overcome by looking to the underlying operation of the principle. Further analysis of this operation, however, revealed deeper problems in that the principle undermines the doctrine of judicial precedent, legal certainty and the rule of law. Accordingly a practical approach to determining the source of income is undesirable and unconstitutional. Further research was conducted into the relative merits of a philosophical approach to determining source of income and it was argued that such an approach could provide a more desirable solution to determining source of income as well as approaching legal problems more generally.
- Full Text:
- Date Issued: 2014
- Authors: Grenville, David Paul
- Date: 2014
- Subjects: Unilever (Firm) , South African Revenue Service , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa -- Cases , Income tax -- South Africa -- Cases , Business enterprises -- Taxation -- South Africa , Law -- South Africa -- Philosophy
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:909 , http://hdl.handle.net/10962/d1013238
- Description: This research studies the practical person principle as it was introduced in the case of Commissioner for Inland Revenue v Lever Brothers and Unilever Ltd 1946 AD 441. In its time the Lever Brothers case was a seminal judgment in South Africa’s tax jurisprudence and the practical person principle was a decisive criterion for the determination of source of income. The primary goal of this research was a critical analysis the practical man principle. This involved an analysis of the extent to which this principle requires judges to adopt a criterion that is too flexible for legitimate judicial decision-making. The extent to which the practical person principle creates a clash between a philosophical approach to law and an approach that is based on common sense or practicality was also debated. Finally, it was considered whether adopting a philosophical approach to determining the source of income could overcome the problems associated with the practical approach. A doctrinal methodology was applied to the documentary data consisting of the South African and Australian Income Tax Acts, South African and other case law, historical records and the writings of scholars. From the critical analysis of the practical person principle it was concluded that the anthropomorphised form of the principle gives rise to several problems that may be overcome by looking to the underlying operation of the principle. Further analysis of this operation, however, revealed deeper problems in that the principle undermines the doctrine of judicial precedent, legal certainty and the rule of law. Accordingly a practical approach to determining the source of income is undesirable and unconstitutional. Further research was conducted into the relative merits of a philosophical approach to determining source of income and it was argued that such an approach could provide a more desirable solution to determining source of income as well as approaching legal problems more generally.
- Full Text:
- Date Issued: 2014
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