Ans: shows the relationship between tax rates and the amount of tax revenue collected
by governments
illustrates the argument that sometimes cutting tax rates can result in increased tax
revenue
2). Marginal tax rate
Ans: tax rate that will apply if the tax base increases by one rand
3). Effective tax rate
Ans: determined by dividing tax liability by total profit or income
4). Income tax
Ans: capital gains tax
turnover tax
dividends tax
5). Other types of tax
Ans: value added tax
estate duty
excise duty
customs duty
transfer duty
air passenger tax
unemployment insurance fund
skills development levy
6). Proportional tax
Ans: tax levied at a fixed rate for example, companies tax
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, 7). Progressive tax
Ans: tax rate increases with the amount of money earned, income tax
8). Regressive tax
Ans: tax rate decreases with the amount of money earned, there is no such tax in South
Africa
9). Direct tax
Ans: the same person who earns the income pays the tax, income tax, capital gains tax
10). Indirect tax
Ans: the seller bears the impact of the tax while the consumer pays the tax, VAT
11). Purposive approach
Ans: when interpreting wording in the Income Tax Act, take note of the real intention of
the legislator by reading the explanatory memorandum to discover the purpose behind the
words
12). Contra fiscum rule
Ans: where a provision of the Income Tax Act has two interpretations, the court will
interpret the provision in terms of the interpretation that places a smaller burden on the
taxpayer
13). Objective approach
Ans: when interpreting legislation, the emphasis should be on considering both the
context and the words of the provision with neither dominating the other and furthermore
one should not impose one's views as to what would have been sensible for others to
intend
14). Substance over form
Ans: if problems of interpretation arise in relation to the true meaning of an agreement
or transaction, the courts will be concerned with the substance rather than the form of the
agreement or transaction
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