National Budget

Question 1

National income main source of income is + the types?

Answer 1

the main source of government revenue (income) is taxes
two tax systems
Progressive Tax (taxes on income) and Regressive Tax (taxes on consumption)

Question 2

Progressive Tax Types:

Answer 2

personal income tax- taxes on salaries and wages (higher income higher tax percentage)
Company tax- tax on companies profits
Capital Gains Tax tax payed on profits made by selling of assists e.g houses or vehicles

Question 3

Regressive (consumption) Tax Types:

Answer 3

Value Added Tax (VAT) rate payed on most goods and services of 14% which are not basic necessities
Customs duties- taxes payed imported goods
Excise Tax- luxury items such as cigarettes and alcohol (sin tax)

Question 4

Other sources of revenue of the government:

Answer 4

Sale of state owned assets and businesses
profits generated by state owned businesses e.g South African Airways
Sale/ rental of state owned land or buildings
Fees such as licensing fees

Question 5

What is SARS?

Answer 5

South African Revenue Services
autonomous (independent) of state within the public (private) administration
South African tax system set by national treasury managed by SARS

Question 6

Main Function of SARS:

Answer 6

Collect and administer all National Taxes, duties and levies
provide protection against the illegal importation and exportation of goods.
Advise minister of finance on all revenue matters
facilitate trade by providing customs services at all major exit points of country. customs made possible for companies to trade in an efficient and legal manner also they negotiate and maintain free trade agreements.

Question 7

Difference between tax and subsidy:

Answer 7

tax is compulsory contribution paid by citizens of country to the government
subsidy is the government assists citizens by paying for or absorbing a portion of the cost of specific goods and services e.g bread, education etc.