Sources of Government Revenue in South Africa

Sources of Goernment tax receipts in southeastward AfricaTopicDescribe and explain sources of task receipts gross for subject area, provincial and topical anesthetic anaesthetic spheres of governing in South Africa. What are roughly of the ways in which governing consistence has hiked the provincial and local spheres to submit additional sources of revenue to address the growing necessarily of communities? initiatory appearance tax for South Africa is a massive task due to the corruption taking place. , each(prenominal) 3 spheres of brass must work together to stop corruption. Since 2012 an anti corruption team has been set up to solve this issue. This assignment will focus on ways the political science tries to encourage different speheres to gene ordain their own income.In a more than specific detail this assignment will focus on ways national presidency promote ways to generate income for provincial and local government. This is non an favorable task and then the challenges is as well a main concern and will outline the challenges and possible solutions to scale this.Solutions will be outlined in a detailed way to overcome the issues we are confront , the definitions of the terms as well as the Significance of the Study. This assignment will conclude the information self-contained and what steps ineluctably to be taking to achieve greater results.How does national government get income?Taxes salt away are the main source of revenue of national government. 97,1% of revenue of national government was collected as impose. The main sources of measure for national government are measurees paid by individuals, valuatees paid by businesses, nurse added tax and excises(statssa.gov) Taxes on income, profits and capital gains are attri entirelyed either to individuals or to businesses. These taxes are generally levied on wages, salaries, different compensation, interest, rent, capital gains, profits of businesses, and taxable po rtions of pension.The first type of tax and income for the government is Value-added tax(VAT) .VAT is a tax on goods and operate collected in stages by enterprises but which is ultimately charged in across-the-board to the final purchaser. VAT is usually charged at 14% on consumers final goods and is included in the price you pay for most items much(prenominal) as food items , petrol ,etc. the second type of tax collected by the government is excises tax. Excises are taxes levied on particular products and may be imposed at any stage of production or distribution. Excise duties are imposed mostly on high-volume routine consumable products (e.g. alcohol and tobacco products) as well as certain non-essential or luxury items (e.g. electronic equipment and cosmetics).Administrative fees are also a nonher income for government . administration fees are similar to employmentr charges, but differ in the sense that the service (or benefit) received in return for the fee is defined alt ernatively generally and imprecisely.Such fees include business licences, television licences, diamond export rights, fishing licences, and motor vehicle licences. The dread parking ticket and speeding fine can also be added to the list. Administrative fees and fines are insignificant sources of revenue.South Africas major source of income is borrowing and taking loans from other countries to sustain the economy and the assumes of the citizens Government can borrow from its own citizens and from abroad. Borrowing is often used to finance capital expenditure. Borrowed bullion must be repaid at some point and therefore amount to deferred taxes. Because lenders engender to be adequately compensated for current consumption forg unity, it is imperative that borrowed money should be spent on productive comportivities. sometimes government uses borrowed gunstocksto finance current consumption, a practice that cannot always be defended on stinting grounds.Classification of taxesTher e are both types of taxes such as direct and indirect. below are the two types of taxes discussed and defined.Direct TaxationDirect taxes are imposed directly on individuals and companies (e.g. individualised incometax and society tax). This distinction fundamentally revolves around the issue of tax incidence(i.e. the question of who really pays the tax). It would suffice to rate that we simply cannot tell with certainty in advance what the outcome is going to be. The second type of tax is Indirect taxes .indirect taxes are taxes which are resemblingly to be shifted and are imposed on commodities or food market transactions. Examples are excise ditties and fuel levies. It is also more difficult to adjust the tax rate to the personal circumstances of the consumer. In thecase of indirect taxes it is often possible to shift the burden of the tax to somebody else.There are various types of taxes which government collects revenue from. A primary source of wealth tax for the governm ent is property tax. The property tax base can be defined very broadly to include real property (realty) and personal property (e.g. furniture, motor vehicles, shares, bonds, and bank deposits). Another important tax is the capital gains tax. Capital gains can be defined as increases in the net value of assets over a period (e.g.an accounting period or fiscal grade).the most popular type of tax is the wealth tax .Income and consumption are flow concepts since both are measured over a period of time. Income consists of wages, rental income from property, interest on savings, dividends on shares, and so on. In contrast to income, wealth is a stock concept which is measured at a particular point in time. snatchs and laws pertaining to national government revenueThe main act with regard to national revenue is the familiar finance management act.The Public Finance Management Act, 1999 (Act No. 1 of 1999) (as amended by Act No. 29 of 1999) The Act promotes the objective of good financia l management in order to maximise service delivery done the effective and efficient use of the limited resources and focuses mainly on national and provincial spheres of government.(treasury.gov.za). the second and one of the most discussed more or less act is the National Revenue Fund . There is a National Revenue Fund into which all money received by the national government must be paid, excerpt money reasonably excluded by an Act of Parliament. (sa constitution)How does the National budget effect other speheres of governmentThe national budget plays a major fictitious character . each year the budget gets less for the community for goods and services. Our youthful budget speech , more money will be spent on eskom rather than other essential needs of the community . with a limited budget , revenue will be intemperate to receive for other spheres and thus hurl to generate their own incomeHow provincial government gets revenueProvinces have little revenue of their own but the re is a process governed by the Division of Revenue Act as amended which enables a formula to be used so that states receive shares of revenue collected nationally. Provinces then have some discretion as to allocation of what they receive. government research in 2008 showed that Mpumalanga spent a lower percentage on health than did Western Cape as an example. The needs for the community is growing and with a limited budget and corruption in national government revenue for provinces becomes less each year. President zuma has now wedded more funds to eskom to settle the energy crisis thus making it less for other departments.(SONA).The only way now for provincial government to exit services is to get back to fundamental principle. In a recent interview with our provincial mayor, getting back to basics is a must.(daily currents) . Kwa zulu natal relays mainly with tourism. 2014 has had the most tourism compared to any other year. Also each province relays on own source of revenue such as provincial taxes and fee ,license and fines. A government may expose taxes other than income tax ,etc. Durban also has one of the biggest harbours in the world and receives a administer from custom tax. Johanessburg has the biggest international airport in Africa also benefits a lot from foreigners for tourism. National government is also aiding provinces with breaks due to the service deliver protest.Provinces still have little revenue of their own and are extremely dependent on the national sources. It is fortunate that this is governed by legislation. The national government cannot discriminate against opposition controlled provinces such as WC now and KZN previously. There are also joint meetings in the midst of provinces and national government which case at issues like resource allocation.How does national government encourage revenue for provincial sphere hotshot of the main ways provinces gets a share from national is the Financial and Fiscal Commission (FFC). The FFC is an independent body that is set up under the organization to advise government on the portion of revenue that should go to provincial and local government to subsidise services for poor batch. But these mount are not adequate ,thus the provinces have to generate own source of income . generating income is not an easy task for the provinces as the unemployment rate is rising each year and citizens dont have enough buying power or to support any fund raising activities.South Africa is known for the variety of sports we play and throughout the year there is various international and local events happening. Each province generate income through sports , generating income from the citizens via the sales of tickets ,etc. play ,soccer and rugby are the main sports in south Africa with a huge support of fans. South Africa is soon in the bid for the 2022 common wealth games which is to claim place in Durban . This can contribute to a even higher revenue for that year for the province as over 20 countries participate in these games with tourism for all over the world.Conferences is also taking place in south Africa and Durban ICC remains positive, new destinations and Convention Centres are being developed throughout the world, which will result in even greater competition for conferences and events in the future. Each province also has a main curlion and highlight to attract visitors , example Durban has the beautiful beaches , ushaka marine world and a diverse of cultures. Cape town has robben island , table fate and the beautiful scenery. Johannesburg is the hub for film and tv casting , with tall skyscrapers and movie studios , as well as foundation parks , shopping malls , and best airport in Africa.Laws and policies pertaining to provincial sphere to promote revenue and to provide services.One of the main laws which was recently passed was the Inter-governmental Relations Framework Act. It was passed to make sure that the principles in Chapter Three of the Constitution on cooperative government are implemented. The Act seeks to set up mechanisms to coordinate the work of all spheres of government in providing services, alleviating privation and promoting development. (etu.org.za) Another structure in place is the Provincial Inter-governmental Structures. This act is about the relationships between the three spheres of government The Premier in each province is responsible for coordinating relationships between national, provincial and local government in the province. A Premiers Inter-governmental Forum consists of the Premier, the local government MEC, other MECs, Metro and other mayors. (etu.org.za).National government also contributes by new laws which makes new business to bluff easier and funding if you follow the BBBEE, Act, 2013 (Act No. 46 of 2013). Broad-Based Black Economic Empowerment (B-BBEE) is a specific government policy to advance scotch transformation and enhance the economic participation of black peo ple in the South African economy.(seda.org.za)How local government gets revenuemunicipalities get their revenue from three sources. First, they raise some of their own revenue by charging all people who own property such as land, houses and businesses grade based on the value of their property. The second way they raise revenue is by charging tariffs for services like water, electricity, refuse removal and the use of municipal facilities such as sports grounds. Some municipalities can generate a lot of revenue in this way, while poorer municipalities raise virtually nothing and are almost tout ensemble dependent on funding transfers from national government, which is the third source of revenue for municipalities. Municipalities also receive funding from national government in the form of conditional grants . (localgovernmentaction.org)Challenges for local governmentLocal government relays more on taxes. There has been many challenges regarding taxes as more than 50 percent of sou th Africa lives in familiar settlements and dont pay taxes.In the past, municipalities have not spent all the money allocated to them through this grant due to a lack of capacity and the mismanagement of funds. During the 2010/11 financial year, for example, 272 municipalities in South Africa did not spend a quarter of what was available to them and some of this money had to be returned to Treasury. This has most certainly contributed to the lento pace at which municipalities are providing infrastructure for services. (localgovernmentaction.org)Although funding from national and provincial government are given to local government , many ward municipal managers do not do their jobs to monitor and gauge the needs for the community thus from above funds was given back to the treasury.How does national government encourage revenue for local sphereNational government encourages various ways to get income. First they domiciliate many incentives in the form of money. These usually occu r if they follow the BBBEE procedure. Secondly , fund raising take place , many NGOS often have fund raising schemes to help support a destitute course or to fund problems in the area. NGOs play a vital role and a big help to the government for providing goods and services to the community. Examples of NGOS are feed the babies fund, and NORSA. Municipalities with the most clean audits also gets rewards.The link between national sphere , provincial sphere and local sphereThe different spheres of government depend on each other for support in encounter implementation, and regular communication is essential. For example, when a municipality proposes the development of a new township in its integrate maturement plan, health and education services have to be provided by provincial government. Water services have to be provided by national government, and finances for housing development have to be transferred from national to provincial government from where it goes to the housing d evelopers approved by the municipality.Laws and policies pertaining to local sphere to promote revenue and to provide services.The first act is the Municipal systems act 32 of 2000 . It is a Framework for planning, performance management system, effective use of resources and organisational change. , it also provides Core principles and mechanisms and processes necessary for community participation. Chapter 4 of the Act deals with community participation and define the need for the development of community participation. Another act which relates to this is the Municipal Finance Management Act 56 of 2003. This act regulates budget and financial management practices in municipalities and Helps to maximise the capacity of municipalities to deliver services to all communities.Integrated development plan (IDP)The IDP is a 5 year plan by the government to eridacte poverty and to create jobs . Every municipality has to draw up an Integrated Development Plan (IDP). An Integrated Developmen t Plan is a super plan for an area that gives an overall framework for development. It aims to co-ordinate the work of local and other spheres of government in a coherent plan to improve the quality of life for all the people living in an area. It should take into account the existing conditions and problems and resources available for development. The plan should look at economic and social development for the area as a wholeConclusionFrom the above discussion all spheres of government must work together to achieve greater results. They need to be inter tie in and distinctive. All the steps and polices must be implemented to achieve best results and a corruption pardon society and country. The national budget as we learnt also plays a vital role in the revenue for all 3 spheres of government.Ward councillors and mayors have a big task to adduce and improve conditions for society. There are many challenges which all spheres need to overcome in order to champion a good service de livery to the communityReference pagewebsitesPolity.org.za,. Local Government Municipal Finance Management Act (No. 56 Of 2003). N.p., 2015. Web. 19 Feb. 2015Acts.co.za,. Municipal Finance Management Act, 2003 (Act No. 56 Of 2003). N.p., 2015. Web. 19 Feb. 2015.Etu.org.za,. Inter-Governmental Relations And Planning In Government. N.p., 2015. Web. 19 Feb. 2015.Parliament.gov.za,. N.p., 2015. Web. 19 Feb. 2015.Mogalecity.gov.za,. Mogale City. N.p., 2015. Web. 19 Feb. 2015.Tshwane.gov.za,. Home. N.p., 2015. Web. 19 Feb. 2015.Localgovernmentaction.org,. Municipal work out Local Government Action. N.p., 2015. Web. 20 Feb. 2015.Booksmoeti, kabelo. Public Finance Fundementals. 2nd ed. cape town juta co, 2014. Print.Introduction to local government , 2nd ed. Cape town jutaJournalsk, phago. Democracy In South Africa. Journal of Public judicatory vol 49.3 (2014) n. pag. Print.Politeia Department of Political Science and Public Administration, University of South Africa, Pretoria, South Af rica 0256-8845Africanus Department of Development Administration and Politics, University of South Africa, Pretoria, South Africa 0304-615X