Abstract
M.Comm.
Around April to June each year, many South Africans have to deal with their
personal income tax liabilities, for that year. These are times of uncertainty to
many of these people due to their lack of knowledge relating to personal
income tax. This leads to people running around seeking assistance from
friends, or in some cases paying consultants a small fortune, to have their
income tax returns handed in before the deadline.
If a taxpayer does not have adequate knowledge about taxes, then that
person will most probably not know what his tax liabilities are and how to
legally limit these tax liabilities. The main purpose of this study is to make the
uninformed taxpayer aware of his tax liabilities and to assist such a person so
that he does not pay more tax than he has to.
The literature study deals with a brief overview of the history of taxation, the
impact of the national budget on a person's tax liabilities and the role of the
South African Revenue Service (SARS). This portion of the literature study is
aimed at giving the uninformed taxpayer a background regarding income tax.
The final part of the literature study deals with the calculation of a South
African's personal income tax liability. Although many of the points have been
simplified, it is still quite possible that they can be confusing to the uninformed
taxpayer.
The theory was then used to develop a framework. The purpose of this
framework is to assist the uninformed taxpayer to determine the different
components of his personal tax liabilities. It will also help the taxpayer to
understand how complex it would be to complete his own tax return. This
would, in turn, assist the taxpayer in deciding whether he should complete is
own tax return or whether he should seek advice from someone who has a
better understanding of the tax liabilities of a natural person.
To test the framework, the tax liabilities of actual individuals were determined.
The results obtained were checked and confirmed as correct. Based on this it
was concluded that the framework could be used for the purpose for which it
is intended.
The fact that the framework is graphic and a step-by-step guide, it can be
used by the uninformed taxpayer to determine his own personal income tax
liability. The framework is basic and would therefore not be adequate to use in
very complex situations. Therefore, further development would be required to
deal with such cases.