instructions
QUESTION 1
- Free tax investment system
- Tax practitioner system
QUESTION 2
INCOME TAX
Income tax is levied on all income and profit received by a taxpayer, which includes individuals, companies, and trusts. Various other types of tax fall under the Income Tax Act, including capital gains tax, donations tax, SITE, PAYE and provisional tax
Local businesses are taxed at 28%, individuals are taxed at a rate between 18% and 40%, while Trusts (excluding special trusts) are taxed at 40% on profit.
VALUE ADDED TAX (VAT)
VAT (Value Added Tax) applies to all goods and serviced at a standard VAT tax rate of 14%. However, certain items are zero-rated, e.g. exports, petrol, diesel and basic food items (such as brown bread, milk, and fruit). Certain services are exempted from the VAT, for example, educational services, public transport, and residential rental accommodation.
CAPITAL GAINS TAX
Capital gains tax applies when an asset is disposed of, in other words, it changes ownership. Examples are when a property is sold or company shares are acquired.
PROVISIONAL TAX
Companies automatically fall into the provisional tax system, but anyone who receives income other than remuneration (for example, rental income from a property or interest income from investments) is a provisional taxpayer. Three provisional tax payments based on an estimate of annual income are made during each financial year, the first after six months, and the second at the end of the financial year. The third payment is made 6 months after the financial year.
PAYE (Pay-As-You-Earn)
When a firm employs personnel, a tax is deducted from the employee’s salaries. The advantage of this is that tax liability for a year is paid off over 12 months, instead of a lump sum being charged at one time.
QUESTION 3
SIMILARITIES
Both KPMG and SARS intend to what is right for the economy of the country. They also provide infrastructure in the country. They both deal with accountant and auditors who are seen as watchdogs, they are guided by the principles of the code of conduct
DIFFERENCES
SARS
South Africa revenue service collects the tax and also encourages compliance with tax and customs law to ensure that everyone pays their fair share. They do so in a manner that does not unduly impede trade, economic growth, and development by imposing excessive and unfair administrative burden on taxpayers, traders and businesses and to achieve compliance in the most efficient and cost-effective manner and also aspire to contribute to the building of fiscal citizenship reflected by a law-abiding society. And their approach to promoting compliance is based on three principles. They must make taxpayers aware of their obligations, make it easy to meet them and act against those who break the law. Sars also include some values such as:
- Mutual respect and trust
- Equity and fairness
- Integrity and honesty
- Transparency and openness
- Courtesy and Commitment
Sars is also an innovative revenue and customs agency that enhances economic growth and social development that supports the country’s integration into the global economy in a way that benefits all South Africans.
KPMG
KPMG is a firm for themselves, clients and for the marketplace. Their values describe who we are, what they do, and how they do it. Their values also help them attract and keep quality people, develop relationships with the appropriate clients, and protect and enhance their reputation. They aim to incorporate them into their relationships with clients and colleagues so that they are reflected in the work they do every day and in the relationships they have with their clients.
The KPMG culture is rooted in their values and integrity and also a policy of open and honest communication builds trust and collaboration, while their flexibility and diversity create a culture in which people share knowledge freely, bringing out the very best in each other.
QUESTION 4
4A
In December 2014, KPMG SA was commissioned by Sars to perform an extensive document investigative review which resulted in the “Report on Allegations of Irregularities and Misconduct”.
Gordhan was investigated by the Hawks over the alleged unit but was eventually charged with an administrative issue over the rehiring of former deputy commissioner Ivan Pillay and his pension package.
To South Africans, I say take strength in your collective action to hold accountable all those responsible for the demise of the quality of our democracy and the decimation of state institutions,” Gordhan said.
KPMG SA CEO Trevor Hoole, as well as chief operating officer and country risk manager Steven Louw, resigned on Friday, along with five other senior executives.
KPMG must realize the extent of the damage that their report on the so-called “rogue unit” at the South African Revenue Service (Sars) has caused to the country, Future South Africa said on Saturday.
Future SA had previously called for the business community to sever their ties with KPMG SA for their role in aiding and abetting the wealthy, politically connected Gupta family to “loot public coffers”, the organization said in a statement.
While we welcome the results of the review and the resignations of a number of senior KPMG officials as a result of the review, this is only a good start and not the end of the matter. KPMG must realize the extent of the damage that their work caused South Africa.
Their report on the so-called ‘rogue unit’ at Sars lent credence to fallacious stories about one of the most effective investigative units in South Africa and contributed to the capture of Sars. Sars is now a shadow of its former self,” Future SA said.
It was worth noting that Sars had been mired in controversy since the “rogue unit” allegations were presented as fact in news coverage. This included the tax ombudsman recently releasing a report indicating how the current management at Sars was unduly withholding refunds from taxpayers and Finance Minister Malusi Gigaba releasing a report showing that Sars had under-collected by R13 billion in the first quarter of the 2017 tax year.
4B
The investigation found that there were certain red flags that came to KPMG South Africa’s attention regarding the integrity and ethics of the Guptas that were not appropriately considered and addressed at that time. Had one or more of those red flags been heeded, KPMG South Africa would have stopped working for the Guptas earlier.
KPMG South Africa’s client acceptance and continuance process will be centralized into a specialized team led by an experienced KPMG South Africa partner with the appropriate skills to evaluate the information provided on new and existing clients. Whenever integrity issues are identified, either the firm risk management partner or an ad hoc panel of senior partners will be consulted and decide upon the acceptance decision.
The findings of the investigation have reinforced the criticality of a leadership and governance model that sets the right tone from the top and ensures appropriate accountability and responsibility at every level of leadership within the firm. They are also willing to make donation into education.
Donation
In addition to the R23 million fee for the SARS report referred to above, KPMG South Africa will also make a donation of R40 million into education and anti-corruption, not for profit organizations. The R40 million figure is based on the total fees earned from Gupta related entities to which KPMG South Africa provided services from 2002.
4C
Cape Town – Former South African Revenue Service (SARS) group executive Johann van Loggerenberg has called on KPMG South Africa to “immediately” withdraw the totality of its controversial ‘rogue unit’ report, not just the conclusions and findings.
This is the first time he has publically addressed the report since KPMG SA retracted its conclusions and findings earlier this month, following an internal investigation.
Van Loggerenberg, in a statement from his lawyers Boqwana Burns, said KPMG’s public apologies and statements following its retraction did not suffice.
The apologies are totally inadequate when measured against the immense harm caused to the economy, the country, a key state institution and many innocent individuals, their families and friends – most of whom have had no voice to defend themselves through their ordeal.
His lawyers wrote that Van Loggerenberg had been “demonstrating” to KPMG SA for almost two years that its report was “profoundly flawed.
On Friday, September 15, the same day KPMG cleared out its South African leadership, it also retracted the findings of what has become known as the ‘rogue unit’ report it wrote for SARS.
4D
As a result, KPMG International has conducted a comprehensive investigation. While the investigation did not identify any evidence of illegal behavior or corruption by KPMG partners or staff, this investigation did find work that fell considerably short of KPMG’s standards.
Based on the results of this investigation, significant actions have been taken and are being announced today with respect to KPMG South Africa. These actions include a series of leadership changes, changes in the governance of KPMG South Africa, and enhanced quality control procedures in certain areas.
They appointed Nhlamu Dlomu to succeed Trevor Hoole as CEO.
Nhlamu was previously KPMG South Africa’s Head of People and Change. She is a highly experienced partner with extensive client experience leading a significant transformation in the Financial Services and other industry sectors in South Africa and overseas.
She has over 17 years’ experience in management consulting, and management roles gained mainly in organizational development and human resources across various industry sectors.
As a former HR Executive for one of the largest banks in South Africa, Nhlamu’s experience spans culture transformation, change management and other people management practices.
QUESTION 5
5A
- Unethical behavior in organizations is often attributed to unethical individuals
- Individuals are affected by their social setting in the same in the way that apples are affected by the barrel in which they are kept
- The same principles apply to organizations within which individuals work can also have either a good or bad influence on their moral character
- People with dubious or even good moral characters can turn into unethical behavior if they find themselves in an organization where unethical conduct is the norm
5B
The man who compiled and signed off on the now discredited KPMG report into the so-called “rogue unit” at the South African Revenue Service, Johannes van der Walt, was also part of a probe into the kickback scandal that German firm SAP was allegedly involved in with the Guptas. Also implicated on Schabir Shaik case of fraud and corruption
I think Johan Van Walt was a good apple in a bad barrel because he worked for kpmg for 22 years and his reputation took a dent in 2004 while he was five years and above working at kpmg. Van Walt has a moral behavior because is the person who can admit his mistakes, for example during the court trial he admitted to having disregarded some of the information at his disposal when compiling his audit report for the trial. And if he was a bad apple he would’ve admitted but to make excuses.
QUESTION 6
6A
Aristotle’s viewpoint is that everything in life has a specific goal and moral virtues is a character trait that enables the person to reach his or her goal. Developing moral virtues starts with our natural inclination.
6B
THREE VIRTUES
- Integrity
- Competence
- Objectivity
Virtues were disregarded because KPMG employees Compromise Integrity by stealing public company accounting oversight board Inspection Information.
In an unprecedented event, on January 22, 2018, it was announced that a former Public Company Accounting Oversight Board (PCAOB) staffer, Brian Sweet, who was hired by KPMG in 2015, leaked confidential information about PCAOB’s plans to audit the company. Most of the leaked information concerned which audit engagements the PCAOB planned to inspect, the criteria it was using to select engagements for inspection, and on what these inspections would focus.
Also going to the Guptas 2013 wedding in Sun City reveal that they lack professionalism and if kpmg employees were adhering to the three virtues they wouldn’t have ignored red flags.
CONCLUSION
Myself as a student, I would make sure that all the South African companies adhere to the code of conduct and also to follow the law. And make sure that manager’s act in the best interest of the shareholders or the company by making integrity, competence, independence and objectivity their second nature and also observe that reports are analyzed on daily basis.
REFERENCE
https://mg.co.za/…/2017-09-18-moyane-clings-to-existence-of-so-called-rogue-unit-d…
research.easybib.com/research/index/search?search=%22KPMG+International%22
www.citethisforme.com/topic-ideas/other/Briefing%20paper-20595922
https://www.dailymaverick.co.za/…/2018-02-22-ntsebeza-inquiry-panel-mum-on-whe…
2018 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
www.sars.gov.za/About/HowTax/Pages/Mandate.aspx https://home.kpmg.com/xx/en/home/about/governance/values…/our-values.htm
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