Perceptions of taxation: A comparative study of different population groups in South Africa

Abstract

In South Africa, there is a significant gap between the amount of tax that is theoretically collectable from economically active persons and that which is actually collected (commonly known as the "tax gap"). Non-compliance by taxpayers is one of the main causes of the tax gap. It has been established that one of the main factors leading to non-compliance, is the attitudes and perceptions of people. Although the perceptions of previously disadvantaged groups in South Africa regarding taxation have been researched, this study extends prior research by investigating and comparing taxpayers' perceptions amongst the four major South African population groups (that is, Black/African, Indian, Coloured and White). This is the main objective of this thesis. This study specifically aimed to determine South African taxpayers' perceptions regarding general tax-related, tax evasion and tax compliance issues. A number of demographic, economic or other factors that might influence respondents' perceptions regarding these issues were also investigated. The significance of this study is emphasised, in that it builds upon previous research, utilising insights from several disciplines and various theoretical perspectives. The data for this study was collected from a sample of 260 South African taxpayers by means of face-to-face interviews, based on a questionnaire, compiled from an extensive literature review. The scope of the study was limited as it focused only on natural taxpayers within the Tshwane metropolitan area (which includes Pretoria, the capital city of South Africa) in Gauteng, as the purpose was not to generalise conclusions to the entire South African population. A further limitation of the study was that it focused on natural persons only; corporate taxpayers were excluded. Future research could extend this study by verifying the findings in other areas, amongst other population groups and corporate taxpayers. iii This research concluded that tax compliance may depend upon several factors, other than deterrence, and that the perceptions of South African taxpayers are likely to be influenced by these factors. One of the main recommendations of the study is the need for comprehensive, widely based communication and education of taxpayers and potential taxpayers by the South African Revenue Services.

The Elasticity of Taxable Income: The Case of South Africa

“…their attitude towards tax avoidance strategies. For example, Oberholzer and Stack () find that different population groups have different opinions on tax evasion/avoidance, but that, in general, 25% of respondents express the desire to keep all earned income ( i.e . not pay taxes), while 13% believe many other people avoid paying taxes and so see nothing wrong with doing the same.…”

A tax compliance risk profile of guesthouse owners in Soweto, South Africa

“…A survey conducted with tax practitioners representing clients from various sectors. • Oberholzer (2007) and Oberholzer and Stack (2009) -A comparative study on perceptions of taxation of different population groups in SA. This study was aimed at individuals and not small business owners.…”

The Complexity of Tax Simplification

“…For instance, in one of these studies, taxpayers clearly expressed the opinion that the tax system in South Africa is highly complex (Oberholzer and Stack 2013). Another study illustrated that taxpayers made great use of professional tax practitioners to ensure that they comply with the tax legislation, which they deemed to be very complex (Lubbe and Nienaber 2012).…”