Abstract
The personal income tax that is levied on the income of
individuals is one of the main components of direct taxation
in South Africa.
The ethical principle of tax fairness, taking into account
the conflicting interest between the taxpayer and exchequer
to increase and decrease taxes is of particular interest in
the levying of personal tax.
The principle of tax fairness is used as a criterion in the
evaluation of the following aspects of the South African
personal tax system:
Progressiveness
Taxation of fringe benefits
Joint taxation
Other aspects such as the taxation of capital
gains and the taxation of Blacks.
In this study it was found that the steep incline of the
existing taxation curve contributes to the allowance of
fringe benefits and the appeal for a system of seperate
taxation.
According to the fairness principle equal income, cash or
otherwise, should be taxed equally. Fringe benefits should
thus be taxed on a larger and a more uniform scale by the
receiver of revenue. However, to ensure that it will still
adhere to the principle of incomplexity, the quantification
of the fringe benefits will have to take place in a simple and
clear manner. Taxation of fringe benefits that is not coupled
with an increase of the income level on which the maximum
marginal rate of taxation becomes applicable, especially in
the higher income groups, can be contra-productive...
M.Com.