Abstract
M.Com. (Business Management)
This study examines the system of value-added tax as
replacement for the retail sales tax which is currently in
operation in South Africa. It furthermore sets out to
provide an insight into the potential local application
thereof.
The following aspects were discussed:
(a) The current state of indirect taxation in South Africa
under the retail sales tax regime.
(b) The origin and development of the value-added tax
system worldwide.
(c) The replacement of indirect taxes through a system of
tax on value added.
(d) The development of value-added tax subsequent to the
initial recommendation by the Margo commission.
(e) A number of problem areas specifically relating to the
structure of the proposed tax, e.g. foodstuffs, farming
activities and capital goods.
(f) The establishment of a clearing mechanism for the BLS and
TBCV countries in a Southern African Customs Union.
(g) General administrative provisions under a value-added
tax and a proposed audit under the system.
The discussion indicates that the retail sales tax is not
conforming to initial objectives (at least in theory) and
the government is of the opinion that value-added tax will
rectify this situation...