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A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa
Dissertation (MCom)--University of Pretoria, 2008.
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University of Pretoria
2013
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| _version_ | 1867613472746897408 |
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| access_status_str | Open Access |
| author2 | Cronje, M. |
| author_browse | Cronje, M. |
| author_facet | Cronje, M. |
| collection | Thesis |
| dc_rights_str_mv | © 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria Please cite as follows Fourie, S 2008, A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-02272009-133118/ > E1217/ |
| description | Dissertation (MCom)--University of Pretoria, 2008. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/30649 |
| institution | University of Pretoria (South Africa) |
| last_indexed | 2026-06-10T12:36:41.872Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/30649 A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa Cronje, M. santie.fourie@za.pwc.com Fourie, Santie Capital gains Inflation South africa Adjustment Tax UCTD Dissertation (MCom)--University of Pretoria, 2008. Inflation is a widespread occurrence in the modern world. Even in very stable economies inflation has increased rapidly over the past 20 years. In South Africa rising food, fuel and power costs will ensure that inflation remains high for some time to come. The income tax system cannot afford to ignore the importance of inflation. Capital gains on assets accumulate over the period the asset was held. The inflationary component included in the capital gain will be bigger the longer the asset is held. Capital gains are taxed only when an asset is sold, thus on a realization and not on an accrual basis. Capital gains are taxed as part of normal income in South Africa. If the annual capital gains are allowed to accumulate over years it might push the taxpayer into a higher marginal tax rate because of the use of a progressive income-tax system. A number of countries used indexation to adjust capital gains for inflation. In some countries indexation has been frozen or abolished and in others it is still used extensively today. Before a system of indexation can be introduced in the taxing of capital gains, a number of key factors should be considered. The benefits derived from inflation adjustment should not be out-weighed by the administrative and compliance cost. In the research it is concluded that South African taxpayers enjoy some limited indirect inflation adjustment. If attention is just focused on the asset side, indexation will create a tax benefit for some taxpayers who will finance the purchase of assets with borrowed funds. The liability side cannot be ignored and therefore further research will be needed to determine if the inflationary interest component should also be disallowed as a deduction for taxpayers. Copyright Taxation MCom Unrestricted 2013-09-09T07:22:00Z 2009-05-18 2013-09-09T07:22:00Z 2009-04-20 2008 2009-02-27 Dissertation Fourie, S 2008, A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa, MCom Dissertation, University of Pretoria, Pretoria, viewed yymmdd <http://hdl.handle.net/2263/30649> E1217/gm http://hdl.handle.net/2263/30649 http://upetd.up.ac.za/thesis/available/etd-02272009-133118/ © 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria Please cite as follows Fourie, S 2008, A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-02272009-133118/ > E1217/ application/pdf University of Pretoria |
| spellingShingle | Capital gains Inflation South africa Adjustment Tax UCTD A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title | A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title_full | A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title_fullStr | A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title_full_unstemmed | A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title_short | A critical analysis of inflation adjustment in the calculation of capital gains tax in South Africa |
| title_sort | critical analysis of inflation adjustment in the calculation of capital gains tax in south africa |
| topic | Capital gains Inflation South africa Adjustment Tax UCTD |
| url | http://hdl.handle.net/2263/30649 http://upetd.up.ac.za/thesis/available/etd-02272009-133118/ |