As a result of increased regulatory focus on a number of firms" tax behaviour, tax compliance is now recognised as a source of reputational risk. Transparency on the reporting of tax related matters in public corporate reports could mitigate a firm"s reputational tax risk. In this study, we develop a framework to evaluate tax transparency in such reports. This framework is then applied to the corporate reports of 50 large firms in South Africa to identify the performance of these firms in terms of the framework. We find that 86 per cent of the firms comply with more than 70 per cent of the mandatory tax reporting requirements. We also show that 50 per cent of the firms are transparent regarding their disclosure of tax strategy and risk management, tax figures and performance, their total tax contribution and the wider economic impact of their tax behaviour. The greatest improvement is required in disclosure regarding tax strategy and risk management and the total tax contribution and the wider economic impact.

The tax burden of individual taxpayers in South Africa is a topic that is much discussed in the country. Studies and debates around the topic are somewhat contradictory, depending on the viewpoint from which the tax burden is evaluated. These contradictory claims relating to the tax burden carried by individual taxpayers in South Africa do not arise in a vacuum, but may in part be attributed to different interpretations of what constitutes the tax burden as a construct. This article provides the results from an analysis of the tax construct and the construct of a (tax) burden. The results are summarised in the form of a conceptual framework that sets out criteria as a consistent foundation for classifying government imposts as they relate to the tax burden of individual taxpayers, not only in South Africa, but also in other countries around the world.

<p class="MsoNormal" style="text-align: justify; margin: 0in 36.1pt 0pt 0.5in; mso-pagination: none;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-weight: bold;" lang="EN-ZA">There has been a significant increase in the number of internet business and e-commerce transactions over the last few years.<span style="mso-spacerun: yes;">&nbsp; </span>More recently, the development of virtual worlds on the internet has become an important feature of the business environment.<span style="mso-spacerun: yes;">&nbsp; </span>Although some research has been conducted in the United States of America into the tax consequences of income earned in virtual worlds, no such research has been conducted in South Africa.<span style="mso-spacerun: yes;">&nbsp; </span>This study adds to the American research by providing a critical analysis of the topic from the South African tax perspective.<span style="mso-spacerun: yes;">&nbsp; </span>The specific aim of the study was to determine whether income earned by South African residents from structured and unstructured virtual worlds respectively would qualify as gross income in terms of the South African Income Tax Act </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt;" lang="EN-ZA">58 of 1962.<span style="mso-spacerun: yes;">&nbsp; </span>It builds on previous international research, but offers a new perspective from the South African point of view. The study will make a valuable theoretical contribution to the application of the basic principles of gross income, and will deal with a brand new concept which did not exist when the principles were laid down.<span style="mso-spacerun: yes;">&nbsp; </span>The research was limited to determining whether the income earned in virtual worlds by South African residents who are taxed on their world-wide income would be included in gross income as defined by the South African Income Tax Act.<span style="mso-spacerun: yes;">&nbsp; </span>Capital gains tax consequences were not considered in any transaction where the income was classified as being of a capital nature.<span style="mso-spacerun: yes;">&nbsp; </span>Also excluded were deductions available to taxpayers in terms of the income included in gross income, and there is no detailed discussion<span style="mso-spacerun: yes;">&nbsp; </span>on when a taxpayer would be regarded as engaging in virtual worlds as a hobby as opposed to conducting a business.<span style="mso-spacerun: yes;">&nbsp; </span>Future research could be extended to this particular area.<span style="mso-spacerun: yes;">&nbsp; </span>This research concluded that most transactions in virtual worlds resulting in income would qualify as gross income under the South African Income Tax Act.<span style="mso-spacerun: yes;">&nbsp; </span>At this stage, the only possible disqualification in terms of the South African gross income definition appears to be income received &ldquo;of a capital nature&rdquo;.</span></p>