Original Research
Does capital gains tax add to or detract from the fairness of the South African tax system?
South African Journal of Economic and Management Sciences | Vol 14, No 4 | a131 |
DOI: https://doi.org/10.4102/sajems.v14i4.131
| © 2011 Warren Maroun, Magda Turner, Kurt Sartorius
| This work is licensed under CC Attribution 4.0
Submitted: 02 November 2010 | Published: 06 December 2011
Submitted: 02 November 2010 | Published: 06 December 2011
About the author(s)
Warren Maroun, University of the Witwatersrand, South AfricaMagda Turner, University of the Witwatersrand
Kurt Sartorius, University of the Witwatersrand, South Africa
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This research seeks to add to the existing body of knowledge on the perceived impact of Capital Gains Tax (CGT) on the fairness of the South Africa Tax System. Building on the largely qualitative work done by Vivian (2006) and Smith (1776), this research makes use of an extensive literature review followed by a correspondence analysis to complement the existing body of research into this area. The literature review discuss the fairness criteria advanced by Smith (1776) (Smith’s tax canon) and identify ‘unfairness characteristics’ of CGT. The correspondence analysis only tests the theories advanced in the literature review and revealed that there are potential sources of unfairness inherent in the Eighth Schedule to the Income Tax Act No. 58 of 1962 (the Eighth Schedule). These include the possibility that that CGT gives rise to double tax and imposes a high burden on taxpayer’s ability to bear the tax load.
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