Original Research

The perceived fairness of turnover tax

Adam Gluckman, Magda Turner
Journal of Economic and Financial Sciences | Vol 11, No 1 | a174 | DOI: https://doi.org/10.4102/jef.v11i1.174 | © 2018 Magda Turner | This work is licensed under CC Attribution 4.0
Submitted: 31 January 2018 | Published: 29 August 2018

About the author(s)

Adam Gluckman, School of Accountancy, University of the Witwatersrand
Magda Turner, School of Accountancy, University of the Witwatersrand, South Africa

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The South Africa Turnover Tax system, implemented on 01 March 2009 to simplify tax for microbusinesses and to improve tax compliance had an insignificant number of registrations and research indicated that a possible reason is the fairness of the tax. The aim of this study is to explore the perceived fairness of the Turnover Tax system. By way of a literature review, criticisms and provisions of the Sixth Schedule to the Income Tax Act No. 58 of 1962 were identified and used as statements on a survey questionnaire. Using the principles of a fair tax system as advanced by Adam Smith a correspondence survey which included two open-ended questions was issued to participants with knowledge of Turnover Tax to establish whether the statements corresponded to any of Adam Smith’s Maxims. The results reveal that the Turnover Tax system is not perceived as completely fair and encourage Government to relook at the legislation with the intend to simplify it further, to removing ambiguity and add detailed lists of excluded services. Education and training of taxpayers is important. A repetition of this study on taxpayers registered on the Turnover Tax system will make further contribution and add to the insight into the fairness of the Turnover Tax system provided by this article.


fairness; tax compliance; turnover tax; micro businesses; correspondence analysis


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