TAXL8422 THEME 2

What are the three broad tax bases in the South African tax system?

• Taxation of income, taxation of property, taxation of goods

• Taxation of income, taxation of assets, taxation of securities

• Taxation of income, taxation of services, taxation of capital gains

• Taxation of income, taxation of consumption, taxation of wealth

Which act is the taxation of income based on in South Africa?

• Income Tax Act of 2001

• Customs and Excise Act

• Transfer Duty Act

• Estate Duty Act

What is the second largest revenue raiser in South Africa?

• Customs duties

• General sales tax

• Value-added tax

• Excise duties

What is the purpose of taxation in terms of revenue?

• To redistribute resources

• To generate sufficient revenue to assist in the financing of government activities

• To discourage certain types of activities

• To promote economic growth

What is the main objective of taxation in terms of socio-economic aspects?

• Discouragement of inflation and unemployment

• Promotion of saving and investment

• Encouragement of certain types of activities

• Redistribution of resources

According to Adam Smith, what is the most widely accepted measure for equity in taxation?

• Ability-to-pay

• Consumption

• Income

• Wealth

What does the second canon of taxation according to Adam Smith emphasize?

• Cost effectiveness and efficiency

• Convenience

• Certainty and simplicity

• Equity

What does the fourth canon of taxation according to Adam Smith require?

• The tax system should be neutral towards all kinds of activities

• The tax system should have low unproductive costs

• The tax system should have low collection costs

• The costs of a tax should not be a disproportionately high percentage of the revenue yield

What are the components of collection costs in taxation?

• Administrative costs and compliance costs

• Dead-weight market costs and neutrality

• Unproductive costs and neutrality

• Administrative costs and dead-weight market costs

What is the economic function of a tax in a market economy according to Adam Smith?

• To promote economic growth and development

• To encourage certain types of activities

• To transfer resources from the private sector to the public sector

• To avoid inflation and unemployment