Learning Unit 1

Question 1

Name the different taxes set up by the South African government

Answer 1

1. Income tax
2. Value added Tax
3. estate duty
4. excise duty
5. Customs duty
6. Transfer duty
7. Air passenger tax
8. Securities transfer
9. UIF
10. Skills development levy(SDL)

Question 2

Income tax includes

Answer 2

Capital gains
Turnover tax
Dividends tax

Question 3

The government has a fiscal year that runs from

Answer 3

1 April to 31 March each year

Question 4

The budget speech is based on

Answer 4

The National Budgets

Question 5

When is draft taxation bills promulgated as a Act of Parliament?

Answer 5

When the act is published in the Government Gazette

Question 6

The Income Tax Act stays exactly the same every year?

Answer 6

No , it’s affected by a number of amended acts every year

Question 7

Before legislation is passed by parliament it is called

Answer 7

A Bill

Question 8

A Bill is always accompanied by

Answer 8

An explanatory memorandum, which gives reasons for the amendment

Question 9

The government issues two amendment Acts per fiscal year

Answer 9

1. Taxation Laws amendment Act

2. Taxation Laws second amendment Act

Question 10

Date of promulgation

Answer 10

Date at which it is published in the GOVERNMENT GAZETTE

Question 11

Attached to our Income tax act are

Answer 11

11 Schedules

Question 12

SARS

Answer 12

South African Revenue Service

Question 13

The commissioner of SARS has powers and duties given to him/ her by

Answer 13

The Income Tax Act

Question 14

The commissioner reports to

Answer 14

A board of directors which in turn is accountable to the MINISTER OF FINANCE

Question 15

SARS was established in terms of the

Answer 15

South African revenue Service Act as an autonomous and independent section of Government

Question 16

The South African tax regime is set by

Answer 16

The national Treasury and administered by the commissioner

Question 17

CSARS , CIR , SIR are abbreviations for

Answer 17

The commissioner of SARS

Question 18

On what basis are South Africans taxed?

Answer 18

Residency

Question 19

What does residence basis of taxation mean

Answer 19

Residents of RSA are taxed on all their income they earn , anywhere in the world

Question 20

Where a person is not a resident , they will still be taxed

Answer 20

In South Africa on income earned from a South African source

Question 21

Taxation in RSA can be classified According to

Answer 21

1. What is tax levied on
2. The method used to calculate tax
3. Who must pay

Question 22

Taxes based on what is taxed

Answer 22

1. Income - income tax
2. Consumption-VAT
3. Wealth-Capital gains
4. Other - transfer duty

Question 23

Taxes based on who pays

Answer 23

1. Direct - person who earns pays

2. Indirect - seller bears impact while consumer pays

Question 24

Taxes based on method of calculation

Answer 24

1. proportional - company tax
2. Progressive
3. Regressive

Question 25

Taxation rules are also referred to as

Answer 25

Provisions

Question 26

Binding general rulings issued by the CSARS

Answer 26

Are binding on SARS AND TAXPAYERS

Question 27

Interpretation notes

Answer 27

Are NOT binding on SARS except if they are a binding private of class ruling.

Question 28

The purpose of an interpretation note is

Answer 28

To set out how SARS will interpret or apply certain provisions

Question 29

If a interpretation note provides guidance on how the CSARS intends using his/her discretion

Answer 29

The interpretation note will be binding on SARS and therefore have the same effect as the law

Question 30

CONTRA FISCUM rule

Answer 30

According to this rule , where a provision of the Income Tax Act has 2 interpretations , the court will interpret the provision in terms of the interpretation that places the smaller burden on the taxpayer.

Question 31

When a taxpayer Disagrees with SARS regarding an assessment, name the overarching remedies

Answer 31

1. Alternative dispute resolution (ADR)
2. The tax board
3. The tax court

Question 32

Request for reasons

Answer 32

A taxpayer who is aggrieved by an assessment may request SARS to provide the reasons for the assessment prior to lodging an objection.

Question 33

Lodging a objection

Answer 33

A taxpayer who wishes to object to an assessment must deliver a NOO within 30 days after the delivery of reasons from SARS. Specify grounds for objection on the NOO form or the ADR1 form

Question 34

If a objection has been lodged by the taxpayer, SARS must

Answer 34

Notify the taxpayer of the allowance/ disallowance of the objection and the basis for it within 60 days after delivery of the taxpayer’s objection

Question 35

The NOO FORM is applicable to

Answer 35

Personal Income Tax (administrative penalties and assessed tax)

corporate income tax

Question 36

The Alternative dispute resolution for objection (ADR1)

Answer 36

VAT
PAYE assessment
Income tax for trusts
Secondary tax on companies prior to 1 April 2011

Donations tax