Consumer Studies: Taxes

Comprehensive vocabulary flashcards covering the concepts, types, and categories of taxes in South Africa as presented in the Consumer Studies Grade 12 Term 2 curriculum.

Tax (Revenue)

The fee charged by government on products, income, or activity, used to fund public services offered to the public.

South African Revenue Service (SARS)

The collection agency that acts on behalf of the government to collect tax revenue.

Budget Speech

An annual presentation in February where the Minister of Finance outlines the projected income for the year and how it will be spent.

Tax Year

The period for tax assessment that begins on $1$ March and ends on $28/29$ February.

Direct Taxes

Taxes paid on personal or business income earned, based on the principle that those with higher incomes are taxed more.

Indirect Taxes

Taxes charged on goods and services, which are often hidden in the price of the items.

Income

In the context of tax, this refers to salary, wage, bonus, remuneration for overtime, lump sums, business revenue, investments, rental income, annuities, capital gains, or dividends.

PAYE (Pay As You Earn)

A form of income tax that the employer deducts from employees' income and pays over to SARS throughout the year.

Provisional Tax

Income tax applicable to taxpayers with irregular income (e.g., farmers, freelancers) based on estimated income from the previous year, paid in two installments.

IRP5/IT3

Tax certificates issued by employers reflecting total income earned in the tax year and total PAYE deductions paid to SARS.

Capital Gains Tax

Tax charged on the profit earned when selling a property.

Property Tax/Rates

A tax paid by homeowners to the municipality, calculated based on the value and location of the property to fund community services.

Estate Duty

Tax payable on a person's estate after their death.

Transfer Duty

Tax paid by a buyer when property ownership changes; the first $R900\,000$ is not taxable.

Value Added Tax (VAT)

A percentage, currently set at $15\%$, added to the price of goods and services at each stage of production.

VAT Exempted Items

Specific products such as brown bread, maize meal, rice, vegetables, fruit, and milk on which VAT is not charged to make them more affordable.

Excise Duties and Levies

Taxes mainly imposed on non-essential items like tobacco, alcohol, electronics, and perfume; also known as 'sin taxes'.

Custom Duties

Taxes levied on all goods entering the country, paid by the importing company directly to the state.

Environmental Levies

Levies charged on plastic carriers, non-energy saving lamps, and the use of non-renewable fuels like coal and gas.

Income Tax Evasion

The use of illegal methods to reduce tax liability, such as not declaring full income or claiming allowed deductions falsely.

Income Tax Avoidance

Using legal methods and good financial planning, such as making contributions to a retirement fund, to reduce tax liability.