School of Accounting, Economics and Finance

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Public works programmes and a basic income grant as policy responses to unemployment and poverty in South Africa.
(2007) Biyase, Mduduzi Eligius.; Bromberger, Norman.
No abstract available.
The applicability of the risk-free rate proxy in South Africa : a zero-beta approach.
(2009) Charteris, Ailie Heather.; Strydom, Barry Stephen.
South Africa's seaborne commerce and global measurement of shipping costs.
(2006) Chasomeris, Mihalis Georgiou.
No abstract available.
Public works programmes and a basic income grant as policy responses to unemployment and poverty in South Africa
(2007) Biyase, Mduduzi Eligius.
No abstract available.
A critical analysis of the contributions of James Tobin to economics and its relevance to the South African economy.
(2009) Goolab, Mohammad Ziad.
This study reviews three of Tobin’s major contributions to economics, namely; Tobin’s q , liquidity preference as a behavior towards risk, and Tobin’s global transaction tax on foreign exchange transactions to identify any potential unifying features. The original suggestion of this thesis, given Tobin’s last contribution, is the role of savings that links all three contributions. The extension of this study aims to review these contributions so as to come up with po ssible links between them and apply the theory of q to a sample of forty five South African firms to a ssess firm diversification and performance measurement when it comes to monopoly profits, as well as the stability of any exchange rate when it comes to the Tobin tax issue, given South Africa’s links to the Pound, Dollar and Euro. Our findings out of the empirical analysis performed hints at investors how to go abo ut in maximizing profit in the South African market based on the diversification s trategies they can adopt. Indeed non-diversified firms have a higher risk involved a nd performed better than diversified ones from 2007 to 2009. Our results bas ed on book values are also of great relevancy to entrepreneurs in assessing the degree of diversification optional to them. The deviation of q from unity is another interesting point to note wh en it comes to ordinary profits for monopoly firms like Eskom. Tobin’s q and risk are indeed connected through discounting and the relationship between risk and a transaction tax imposed on international financial transactions is taxation itself. In order for economic growth to arise into an economy, investment is cruc ial and this is achieved if volatility in financial markets is reduced, and hence the impo rtance of reviewing the Tobin tax. The focus here is to link savings, the Tobin tax an d the issue of international financial market liberalization to determine the impact on gl obal developments and trace these through to the South African situation. We also rev iew Tobin’s q and its important link to the IS/LM framework which differs from the normal textbook a nd Keynesian view. In other words we explore in detail, Tobin’s (1969) general equilibrium approach to monetary policy and look at how financi al policies and events can influence aggregate demand, through an effect on th e valuation of physical assets relative to their replacement cost. As the review h opes to find a common theme, in the three contributions, we present a discussion of eac h original article in some detail. Chapter Two and Three includes Tobin’s q and portfolio decisions respectively. Chapter Four covers the tax on foreign exchange tra nsactions in greater detail, and vii attempts to view this as a solution to the passing current world economic crisis. A final chapter provides a summary of our results and modest macroeconomic proposals for South Africa.
Globalisation, trade liberalisation and the labour market: lessons for South Africa.
(2007) Parshad, Nishani.
The returns to self-employment in South Africa : an analysis of household survey data.
(2008) Steenkamp, Francois Karl.; Posel, Dorrit Ruth.
This study investigates self-employment in South Africa focusing particularly on earnmgs differences among the self-employed. A large earnings gap is present among Blacks and Whites in self-employment and the study examines how much of this earnings gap is attributable to differences in observed characteristics of the self-employed, and how much derives from differences in the returns to these observed characteristics. I estimate earnings equations using data from the September 2004 Labour Force Survey and find that variables representing individual, household and employment characteristics of the self-employed are determining part of their earnings. Using the Oaxaca-Blinder decomposition technique, I however, establish that only 55 percent of the earnings differential between Blacks and Whites in self-employment is attributable to differences in observed characteristics. The remainder of the earnings differential may reflect the effects of omitted (unobserved) characteristics, or it may reflect differences in the returns to observed characteristics. Different returns to endowments may be the results of discrimination among the self-employed, including consumer discrimination and discrimination in access to credit or product markets.
Identifying motherhood and its effect on female labour force participation in South Africa.
(2008) Van der Stoep, Gabrielle.
The objective of this thesis is to investigate the relationship between motherhood and women's labour force participation in South Africa. The key problem in estimating this relationship is the endogeneity of motherhood/childbearing with respect to women's labour force participation. Childbearing behaviour and decisions to participate in the labour force are jointly determined; and unobservable characteristics which influence childbearing behaviour are also correlated with women's labour force participation. This thesis shows that the definition of motherhood can exacerbate these sources of endogeneity bias. International studies typically identify mothers as women with biological children aged 18 years or younger who are co-resident with at least one of their children. In South Africa, however, a sizeable sample of women is not co-resident with their children. The remaining sample of co-resident mothers are a non-random sample of all mothers who are less likely to participate in the labour force than all mothers. Placing a co-residency restriction on motherhood therefore biases the relationship between motherhood/childbearing and labour force participation. In particular, it overestimates the negative relationship. In the international literature instrumental variable (IV) estimation has been used to disentangle these causal mechanisms. This thesis also considers an application of same sex sibling composition, first introduced by Angrist and Evans (1998), as a strategy to identify the exogenous effects of childbearing on women's labour force participation in South Africa. Little or no research has investigated this relationship in South Africa. One possible explanation for this is that studies on female labour force participation in South Africa have not been able to match women to their children with the datasets that have been analysed: most nationally representative household surveys in South Africa do not contain detailed birth history information. The first part of this thesis analyses what data are available to identify women with children and the quality of these data; it also outlines four different methods to match women to their children using these data. The second part of this thesis investigates the relationship between motherhood/childbearing and women's labour force participation in South Africa.
Living together after genocide : a case study of reconciliation efforts in Burgesera District after 1994 Rwanda genocide.
(2008) Karegye, Kamili.
The overall objective of the research was to evaluate the achievements of reconciliation process in Bugesera district after the Rwandan 1994 genocide. Bugesera district lost over 62,000 Tutsi during genocide, being the most hit in the country. Today, the survivors and perpetrators are living together in the same district. The study is aimed at evaluating the impact of reconciliation mechanisms in place and how these mechanisms can be enhanced to get better results. The research was conducted in Bugesera district and qualitative research methods were adopted where by thirty respondents were interviewed; ten from the survivors , ten from released perpetrators of genocide, five district officials, three from NGOs and two church leaders. The research was based on both primary and secondary data, but primary data was used mostly. Most of the key concepts used in the research were explained in the literature review. From the research, it was revealed that efforts are in place to reconcile the survivors and perpetrators but people are still suspicious of one another. That a gap between survivors and perpetrators still exists, irrespective of government and patterns' efforts in bringing them together. The research suggested a number of recommendations, which would enhance reconciliation in the district.
An econometric analysis of the real demand for money in South Africa : 1990-2007
(2009) Niyimbanira, Ferdinand.
A stable money demand function plays a vital role in the analysis of macroeconomics, especially in the planning and implementation of monetary policy. With the use of cointegration and error correction model estimates, this study examines the existence of a stable long-run relationship between real money demand (RM2) and its explanatory variables, in South Africa, for the period 1990-2007. The explanatory variables this study uses are selected on the basis of different monetary theories, including the Keynesian, Classical and Friedman‟s modern quantity theory of money. Based on these theories, the explanatory variables this thesis uses are real income, an interest rate, the inflation rate and the exchange rate. All variables have the correct signs, as expected from economic theory, except the inflation rate. Thus real income and inflation have positive coefficients, while the interest rate and exchange rate coefficients are negative. The results from unit root tests suggest that real income, interest rate and the inflation rate are found to be stationary, while RM2 and the exchange rate are non-stationary. Results from the Engle-Granger test suggest that RM2 and its all explanatory variables are cointegrated. Hence, we find a long-run equilibrium relationship between the real quantity of money demanded and four broadly defined macroeconomic components: real income, an interest rate, the inflation rate and the exchange rate in South Africa. Overall, the study finds that the coefficient of the equilibrium error term is negative, as expected, and significantly different from zero, implying that 0.20 of the discrepancy between money demand and its explanatory variables is eliminated in the following quarter. This evidence suggests that the speed of adjustment for money demand implies the money market in South Africa needs about four quarters to re-adjust to equilibrium. This observation agrees with the public statements of the South African Reserve Bank. Whether this will hold after November 2009 is the obvious subject of future research.
"Can the national budget influence investment and growth? : - a Ricardian perspective"
(2006) Mathfield, Damon.
Since Ricardo's nineteenth-century suggestion that the mean's of financing government spending is irrelevant, theoretical debate concerning the burden of government debt has been vigorous
Assessed losses : an investigation into the restrictions imposed on a taxpayer, prohibiting the utilisation of the relief from taxation arising from an assessed loss.
(2004) Devrajh, Anesh.; Deodutt, Jugjith.
Section 20 of the Income Tax Act, No 58 of 1962 allows a taxpayer that has sustained an assessed loss to carry forward the balance of assessed loss and be set off against income earned in the future years. In addition, the loss sustained from one source may be set off the income from another. The assessed loss may be carried forward indefinitely, provided the taxpayer does not fall foul to a provision that restricts the continued use of the assessed loss. The taxpayer's right to retain, carry forward and utilise the assessed loss will be lost if: • The taxpayer's debt(s) are reduced or extinguished, without it being settled. • When a company cease trading. • Also in the case of a company, when income is channelled into it solely for the utilisation of the assessed loss. A recent amendment prevents certain individuals from setting off the assessed loss sustained in certain activities against the income of another.
Determination of the taxable income of certain persons from international transactions : transfer pricing.
(2004) Govindsamy, Kevin.; Deodutt, Jugjith.
Many intra-firm transactions are non-market transactions and therefore lack a market determined price. A transfer price is the price assigned to such nonmarket intra-firm transfers. Transfer prices are especially important for multinational corporations, since a parent company typically has subsidiaries or branches in other countries and transfers are often made between the component parts of the multinational. As the world has become more internationally dependent, these transactions and the associated transfer prices have come under increased scrutiny. The fear often expressed by governments is that a multinational corporation may manipulate transfer prices in order to transfer profits from one country to another, and thereby affect various government policies. Most notably, transfer prices can affect the tax revenues of both the home and host country. A general international consensus is that the appropriate transfer price is the 'arm's length' price. This is the price that would be charged by two unrelated parties. However, it is often difficult to find such a comparable transaction.
An investigation into earnings per share disclosures in South Africa.
(2004) Harrod, Keith.; Stainbank, Lesley June.
This dissertation examines Earning per share (EPS) as a disclosure requirement for listed companies by investigating firstly, EPS disclosures in annual reports of certain selected JSE listed companies and secondly, the attitudes of the preparers of those annual reports to a number of issues relating to EPS. The three mandatory EPS disclosures - Basic EPS, Diluted EPS and Headline EPS - are discussed with a view to determining their information content and reporting framework. This study also considers whether cash based measures of performance are better than earnings based measures. Due to the reliance placed on reported EPS numbers this study attempts, by an examination of annual reports, to provide evidence as to whether or not South African companies are correctly calculating and disclosing the various EPS measures. By means of a questionnaire survey into the attitudes of the preparers of annual reports, this study also attempts to provide evidence as to the importance of the EPS measures as well as the preparers' perceptions on the appropriateness of the Headline earnings definition. The annual report survey into EPS disclosures revealed that South African companies are correctly calculating and disclosing Basic EPS. Even-though all companies correctly calculate Diluted EPS, most companies do not properly disclose Diluted EPS information. As far as Headline EPS is concerned, the annual report survey revealed that many South African companies make disallowed Headline earnings adjustments with most offenders disclosing higher Headline EPS numbers as a result. The survey into the attitudes of preparers of company reports towards various matters concerning EPS revealed that preparers of annual reports consider Headline EPS to be the most important earnings based measure of performance and the adopted Headline earnings definition as being appropriate. It is therefore important that companies calculate and disclose Headline EPS correctly.
An analysis of money demand stability in Rwanda.
(2005) Sayinzoga, Aussi.; Simson, Richard Andrew.
A stable money demand function and exogeneity of prices is at the core of planning and implementing a monetary policy of monetary targets. This thesis examines both the stability of M2 money demand and price exogeneity in Rwanda for the years 1980 to 2000. We estimate and test the elasticities of the determinants of Rwandan money demand function. We include in this demand function those variables which economic theory indicates must be part of any empirical investigation of money demand. All coefficients had the signs as required by economic theory. We estimate the money demand function for Rwanda using cointegration analysis and an error correction mechanism. The results show real income, prices and M2 to be cointegrated. We employ three tests to show that the estimated demand function for Rwanda is stable. We then test the second requirement for coherence in monetary aggregate targeting that money determines prices. The results show that prices are exogenous to money. But before we can definitely conclude that an inflation targeting regime is feasible from monetary policy perspective, we point out that future research on this important topic must account for exchange rate movements, measure permanent income and specify interest rate changes correctly.
The impact of privatisation : ownership and corporate performance in Lesotho.
(2005) Makafane, Thabo Victor.; Stainbank, Lesley June.
Across the globe, privatisation has become one of the key instruments in the economic reform process. The study investigates the impact of privatisation on selected privatised firms in Lesotho. An evaluation was made of former parastatals that included the Government of Lesotho directly-owned enterprises and Lesotho Bank companies that had since been privati sed, after being declared poor performers and that had been regular recipients of Government subsidies for their survival. The country is in the process of rebuilding its economy after experiencing a major setback in its economy in the late 1990's due to a political crisis. Privatisation was seen as one way of fulfilling this enormous task. Hence, the Government of Lesotho decided to offload some of its enterprises to the public whom they believed to be capable of running them in a profitoriented manner given efficient management and fresh capitalisation. Public participation through share ownership is involved in this process therefore it is important to evaluate these companies' performances. Shareholders are primarily interested in improving their values through maximising profits, and in tum getting high returns. This study also measures the effects of privatisation in Lesotho in terms of its contributions to the welfare of shareholders and individual corporate performances, with emphasis on the theoretical background to the subject and the opinions of directors, managements and employees of selected companies towards the critical performance changes that occurred in the pre and post privatisation era ranging from the late 1990s to date. After the analysis, the investigation revealed that the selected companies performed indifferently. Some organisations managed to grow financially and in size, while others struggled in the new competitive environments. Whilst the study did not show their individual financial performances, it did highlight the effects of privatisation on these companies in an economic manner. It was also established that Lesotho had significantly different objectives ofprivatisation to those of other countries especially developed ones. Key Words: Privatisation, state-owned enterprise, shareholders, ownership, corporate performance, Lesotho, economy, private sector, public sector.
An economic analysis of the institutions related to the land rental market of rural KwaZulu-Natal.
(2005) Kumar, Anita.; Tenza, Themba.
Previous studies by Thomson (1996) and Crookes (2002) in land rental markets of rural KwaZulu-Natal were based on the premise that rental markets brought about efficiency and equity gains. Indeed these gains were proven by econometric analyses in both studies. Poor households that lacked the labour, time and other resources to farm land prior to the introduction of the rental market, tended to leave their arable land idle. In participating in rental transactions, land transferred from these poor households to households with the resources and the willingness to farm; and rental income was earned by the poor households. The current 2003/4 survey sought to evaluate the gains in two new areas, Mhlungwini in the Estcourt District and Duduza in the Bergville District, not covered in previous studies. Institutional interventions, related to the land rental market, in Mhlungwini and Duduza, had started in 2000 and 1993 respectively. Equity and efficiency gains were again proven as Lyne (2004) reports. While Chapter 2 provides an in-depth review of literature related to the theory of economic institutions, Chapter 3 applies this knowledge to Thomson's (1996) pilot project on institutional reform. This project, in terms of its action research that bore the ex ante transaction costs of willing participants, set in motion a process of institutional change leading to the development of the land rental market. The introduction of a formal contract, approved by the tribal authorities, served to give credence to rental transactions. In addition, institutional changes were made to reduce the likelihood of crop damage by stray cattle on arable land, in order to encourage willingness of households to lease in land. Recommendations were made by Thomson (1996) to further increase the exclusivity of arable land property rights. Options were evaluated by the author for institutional reform of communal grazing resources. This is to prevent degradation of grazing land caused by overstocking. Recommendations were made to promote sustainable use of the land. Chapter 4, apart from briefly analyzing the current survey results, provides two comparative studies of institutional reform, the first related to Australian water resources and the second related to land registration experiences in Africa. The last section of the Chapter evaluates a proposal for introduction of formal financial services to rural farmers.
The transfer of primary residence and tax implications involved.
(2005) Mkhize, Irvin Mcabangeleni.; Deodutt, Jugjith.
Chapter 1 Introduction In his budget speech of23 February 2000 the minister of finance Mr Trevor Manuel announced the introduction of Capital Gains Tax (CGT) in South Africa. Internationally, the idea of such tax is uncommon, with many ofour trading partners having implemented CGT decades ago. In order to give effect on the proposal relating to CGT, an Eighth Schedule has been added to the Income Tax Act 58 of 1962. The Eighth Schedule determines a taxable gain or loss and a new section 26A of the principal Act provides that the taxable gain is included in taxable income. The date from which capital gains tax started was 1 October 2001. Chapter 2 The transfer ofprimary residence from private individuals The Department of Inland Revenue makes a distinction between what it calls Property Investors and Property Traders. This is a very important distinction; A Property Investor will be liable to pay Income Tax , on rental income and Capital Gains Tax (CGT) on profits made when selling the property in the normal way, however, a Property Dealer (also known as a trader) will find that all his or her profits made on the sale of a property are taxed as Income Tax and not taxed as Capital Gains. So, the key to deciding your tax minimising strategy is figure out whether you will be treated as a dealer or an investor. The Eighth Schedule to th~ Income Tax Act 58 of 1962 provides that only natural persons (individuals) are entitled to exclude the first R1 million of gains on disposal of their primary residences. Chapter 3 & 4 The transfer of primary residence from Trusts, Companies and Close Corporations Many individuals have historically purchased their residence in companies for a variety of reasons, including protection from creditors, avoidance of transfer duty and estate duty and circumvention of the repealed Group Areas Act. These persons now face a potential Capital Gains Tax (CGT) liability when their company, close corporation or trust disposes of the residence. ~ The Eighth Schedule to the Income Tax Act 2004 provides that only natural persons (individuals) and special trusts are entitled to exclude the first R1 million of gains on disposal of their primary residence. This exclusion does not apply where a company, close corporation or trust owns the residence. Chapter 5 Transfer Duty A system whereby conveyancers will be able to lodge transfer duty declarations and make payments electronically via the internet will become operational during April 2005. Conveyancers will be ab, le to lodge the declarations by transferors (sellers) and transferees (purchasers) to SARS branches electronically and simultaneously make payments to designated SARS bank accounts. SARS will verify the duty calculations and authorizes the issue of a transfer duty receipt. Conveyancers wishing to make use of ev filing should register as e-filers by visiting the e-Commerce section of the SARS website. Chapter 6 Conclusion and Recommendations
A discussion of a tax culture from a South African perspective.
(2005) Reddy, Yugavelli (Sandra); Ally, Liaquath Cassim.
Abstact unavailable.
An investigation into the tax implications of independent contractors.
(2004) Maharaj, Ranesh.; Ally, Liaquath Cassim.
In some point in time, an employer would require the services of an independent contractor. Very often one would find that the employer does not have sufficient information in his possession to make a decision to either engage the services of an independent contractor or an employee. Most employers would be aware of their requirements should they choose to engage the services of an employee, however the problem or lack of information arises when the employer decides to engage the services of an independent contractor. This might seem as a simple decision; however an investigation into the taxation of independent contractors proved otherwise. Generally an employer would engage the services of an independent contractor to perform a specific task and pay him for that service. However there are various mechanisms in place that would deem that independent contractor to be an employee. Should this be the case, the employer would be faced with extra costs in the form of interest, penalties and additional levies if he did not deduct employees tax from the independent contractor and pay this over to the Commissioner for South African Revenue Services.. The other taxes that are effected by an independent contractor who is deemed to be an employee are, Pay As You Earn, Skills Development Levy, Unemployment Insurance Contributions, Regional Service Levies and the Labour Laws. It is imperative that the employer understands the various laws in respect of the engagement of an independent contractor. Failure to do so or ignorance of the law would be a disadvantage for the employer. The investigation into the tax implications of independent contractor's would highlight the requirements and problem areas that one should be aware of. This would include how to identify if a contractor is truly and independent contractor or deemed to be an employee. This distinction is very important especially to the employer.

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