The financial impact of direct and indirect taxes on a company in Business Rescue

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dc.contributor.advisorRoeleveld, Jenniferen_ZA
dc.contributor.authorRebello, Dustin Wadeen_ZA
dc.date.accessioned2017-01-19T12:30:32Z
dc.date.available2017-01-19T12:30:32Z
dc.date.issued2016en_ZA
dc.description.abstractCompanies form the backbone of the South African economy and contribute significantly to the tax revenue of the country through both direct and indirect taxes. As a result of the 2007/2008 financial crisis businesses, especially private companies, have been under increasing financial pressure with many companies finally being liquidated as a result of these financial pressures. In 2011, as a means to aid financially distressed companies, the government introduced the concept of Business Rescue ("BR") into law through Chapter 6 of the Companies Act, No 71. of 2008 ("Companies Act"). Despite this attempt by government to provide companies with a means of financial relief BR has been relatively unsuccessful in SA with very few companies managing to be rescued. Companies due to their very nature are subject to many laws and regulations. It is for this reason that, when trying to consider the effectiveness of a particular law or regulation, one must look not only at the primary law but also consider the impact of any auxiliary laws and regulations that work in conjunction with the primary law. This dissertation therefore seeks to understand the financial impact of direct and indirect taxes ("Tax Laws") on a company in BR in order to determine whether these laws support or hinder BR. In this dissertation an overall understanding of BR is obtained by considering the development of BR in SA, the BR process as detailed in the Companies Act and the application of BR in SA including various statistics relating to BR. Thereafter we obtain an overall understanding of the Tax Laws that have been introduced in to SA law since the introduction of BR in SA law as well as some existing provisions of the Tax Laws that are applicable to companies in BR. From the understanding of these two laws we develop a financial evaluation criterion that is used to assess the financial impact of various tax strategies on a company in BR. For the final assessment of the financial impact of the Tax Laws an assessment is performed on the deductibility of BR expenditure in terms of S11(a) and 23(g) of the Income Tax Act, No. 58 of 1962 ("ITA"). Ultimately a conclusion is reached on the financial impact that the Tax Laws have on a company in BR and, at a high level, additional considerations that may improve the success rate of rehabilitating companies in BR.en_ZA
dc.identifier.apacitationRebello, D. W. (2016). <i>The financial impact of direct and indirect taxes on a company in Business Rescue</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from http://hdl.handle.net/11427/22837en_ZA
dc.identifier.chicagocitationRebello, Dustin Wade. <i>"The financial impact of direct and indirect taxes on a company in Business Rescue."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2016. http://hdl.handle.net/11427/22837en_ZA
dc.identifier.citationRebello, D. 2016. The financial impact of direct and indirect taxes on a company in Business Rescue. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Rebello, Dustin Wade AB - Companies form the backbone of the South African economy and contribute significantly to the tax revenue of the country through both direct and indirect taxes. As a result of the 2007/2008 financial crisis businesses, especially private companies, have been under increasing financial pressure with many companies finally being liquidated as a result of these financial pressures. In 2011, as a means to aid financially distressed companies, the government introduced the concept of Business Rescue ("BR") into law through Chapter 6 of the Companies Act, No 71. of 2008 ("Companies Act"). Despite this attempt by government to provide companies with a means of financial relief BR has been relatively unsuccessful in SA with very few companies managing to be rescued. Companies due to their very nature are subject to many laws and regulations. It is for this reason that, when trying to consider the effectiveness of a particular law or regulation, one must look not only at the primary law but also consider the impact of any auxiliary laws and regulations that work in conjunction with the primary law. This dissertation therefore seeks to understand the financial impact of direct and indirect taxes ("Tax Laws") on a company in BR in order to determine whether these laws support or hinder BR. In this dissertation an overall understanding of BR is obtained by considering the development of BR in SA, the BR process as detailed in the Companies Act and the application of BR in SA including various statistics relating to BR. Thereafter we obtain an overall understanding of the Tax Laws that have been introduced in to SA law since the introduction of BR in SA law as well as some existing provisions of the Tax Laws that are applicable to companies in BR. From the understanding of these two laws we develop a financial evaluation criterion that is used to assess the financial impact of various tax strategies on a company in BR. For the final assessment of the financial impact of the Tax Laws an assessment is performed on the deductibility of BR expenditure in terms of S11(a) and 23(g) of the Income Tax Act, No. 58 of 1962 ("ITA"). Ultimately a conclusion is reached on the financial impact that the Tax Laws have on a company in BR and, at a high level, additional considerations that may improve the success rate of rehabilitating companies in BR. DA - 2016 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2016 T1 - The financial impact of direct and indirect taxes on a company in Business Rescue TI - The financial impact of direct and indirect taxes on a company in Business Rescue UR - http://hdl.handle.net/11427/22837 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/22837
dc.identifier.vancouvercitationRebello DW. The financial impact of direct and indirect taxes on a company in Business Rescue. [Thesis]. University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2016 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/22837en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentDepartment of Finance and Taxen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherTaxationen_ZA
dc.titleThe financial impact of direct and indirect taxes on a company in Business Rescueen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
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