Taxation Flashcards
Tax evasion
An illegal activity in which a person or entity deliberately avoids paying a tax liability
Challenges posed by UNFAIR ADVERTISING
-Deceptive advertising can violate the trust of consumers and destroy business relationships
-Businesses can make unwise advertising choices when they are under pressure to increase their profits
-Unfair advertising could negatively affect consumers
-Some advertisements may be regarded as discriminatory because they target some sections of the population
Challenges posed by the pricing of goods in rural areas
-Businesses may form monopolies in rural areas and increase their prices unilaterally which may result in heavy fines
-It may be common practice to pay higher prices for goods of inferior quality in rural areas. There might be more complaints from customers about bad quality products/services
-Businesses may experience a decline in sales due to high cost added into the price of the final product
Challenges posed by tax evasion
-Businesses may pay heavy fines for evading tax
-Tax evasion may negatively impact the business image
-Businesses may not be familiar with the latest changes in tax legislation
-The accountant may be charged high fees for falsifying financial statements
Ways businesses can deal with unethical business practices
-Dealing with unfair advertising
-Dealing with the pricing of goods in rural areas
-Dealing with tax evasion
Dealing with unfair advertising
-Businesses should be encouraged to keep their advertising fair and in line with the constitution
-Advertisements should be honest and legal and not abuse consumer’s trust and lack of knowledge
-Businesses must make sure not to omit key information from the advertisement
-Advertisements should not contain anything that is likely to cause offence
Dealing with the pricing of goods in rural areas
-A business may lobby with other businesses in the area to convince the government to improve the infrastructure in the area
-Businesses must charge fair prices for goods and services
-The business must be willing to avoid unethical business practices to attract customer loyalty
-The businesses must work together with suppliers to share delievery costs to remote rural areas
Dealing with tax evasion
- VAT needs to be charged on VAT-able items
-Submit the correct tax returns to SARS on time
-All products should be correctly invoiced and recorded
-Disclose all sources of income for tax payment purposes
