Gains derived from illegal activities :an analysis of the taxation consequences
- Mtshawulana, Lungiswa Bukeka
- Authors: Mtshawulana, Lungiswa Bukeka
- Date: 2009
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:886 , http://hdl.handle.net/10962/d1001640
- Description: Income Tax in South Africa is levied in terms of the Income Tax Act 58 of 1962 on taxable income, which, by definition, is arrived at by deducting from "gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The Income Tax Act provides no guidance with regard to the taxation of illegal activities, except to prohibit the deduction of expenditure incurred in paying fines or in relation to corrupt activities, as defined. An analysis of the taxation of income derived from theft, fraud and prostitution and the deductibility of expenses relating to that income, is the question addressed in this thesis. In this thesis, an analysis was made of relevant case law in relation to the provisions of the Income Tax Act in an attempt to provide clarity. A brief comparison was also macie of American, United Kingdom and South African tax law. Similarities were found between the American, United Kingdom and South African tax regimes in relation to the taxation of income, but there appeared to be more certainty in America and the United Kingdom in relation to the deduction of expenses. The thesis concludes that recent case decisions have provided certainty in relation to income from illegal activities, but the tax status of the deduction of expenses remains uncertain.
- Full Text:
- Authors: Mtshawulana, Lungiswa Bukeka
- Date: 2009
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:886 , http://hdl.handle.net/10962/d1001640
- Description: Income Tax in South Africa is levied in terms of the Income Tax Act 58 of 1962 on taxable income, which, by definition, is arrived at by deducting from "gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The Income Tax Act provides no guidance with regard to the taxation of illegal activities, except to prohibit the deduction of expenditure incurred in paying fines or in relation to corrupt activities, as defined. An analysis of the taxation of income derived from theft, fraud and prostitution and the deductibility of expenses relating to that income, is the question addressed in this thesis. In this thesis, an analysis was made of relevant case law in relation to the provisions of the Income Tax Act in an attempt to provide clarity. A brief comparison was also macie of American, United Kingdom and South African tax law. Similarities were found between the American, United Kingdom and South African tax regimes in relation to the taxation of income, but there appeared to be more certainty in America and the United Kingdom in relation to the deduction of expenses. The thesis concludes that recent case decisions have provided certainty in relation to income from illegal activities, but the tax status of the deduction of expenses remains uncertain.
- Full Text:
The relationship between accounting choices and share prices : a study of South African listed companies
- Authors: Bunting, Mark Bevan
- Date: 2009
- Subjects: Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:989 , http://hdl.handle.net/10962/d1002724 , Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
- Description: It is widely assumed that the managers of companies behave in a self-interested and opportunistic manner when making the discretionary accounting choices that are applied in the preparation of published financial reports. Empirical research has found evidence for this in the United States, Britain, Spain, France and Australia, amongst other countries. There has, however, been no prior work of a similar nature in a South African context. The purpose of this study is to extend this body of work by examining the relationship between a number of potentially opportunistic (profit-increasing, income-smoothing and solvencyimproving) accounting choices made by the managers of South African listed companies, and growth rates in the share prices of those companies. Data in respect of thirty-nine medium-sized South African listed companies are analysed for evidence of the expected positive relationship between opportunistic accounting choices and share price growth. No evidence is found for this relationship. This may be due to limitations in the research design, inadequacies in the interpretation of the agency theory from which the hypotheses are developed, or a combination of both. Refinements in the research design or a re-interpretation of the theory may be successful in addressing these matters as part of future research efforts.
- Full Text:
- Authors: Bunting, Mark Bevan
- Date: 2009
- Subjects: Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:989 , http://hdl.handle.net/10962/d1002724 , Financial statements -- South Africa , Accounting -- South Africa , Managerial accounting -- South Africa
- Description: It is widely assumed that the managers of companies behave in a self-interested and opportunistic manner when making the discretionary accounting choices that are applied in the preparation of published financial reports. Empirical research has found evidence for this in the United States, Britain, Spain, France and Australia, amongst other countries. There has, however, been no prior work of a similar nature in a South African context. The purpose of this study is to extend this body of work by examining the relationship between a number of potentially opportunistic (profit-increasing, income-smoothing and solvencyimproving) accounting choices made by the managers of South African listed companies, and growth rates in the share prices of those companies. Data in respect of thirty-nine medium-sized South African listed companies are analysed for evidence of the expected positive relationship between opportunistic accounting choices and share price growth. No evidence is found for this relationship. This may be due to limitations in the research design, inadequacies in the interpretation of the agency theory from which the hypotheses are developed, or a combination of both. Refinements in the research design or a re-interpretation of the theory may be successful in addressing these matters as part of future research efforts.
- Full Text:
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