On the Introduction of Income Tax in South Africa by Genl. JC Smuts: Three Eventful Months (24 April 1914 to 20 July 2014)

Published in J. Hattingh, On the Introduction of Income Tax in South Africa by Genl. JC Smuts: Three Eventful Months (24 April 1914 to 20 July 2014), In J. Hattingh, J. Roeleveld and C. West, eds., Income Tax in South Africa – The First 100 years, (2016) Juta & Co: Cape Town, 54-76

23 Pages Posted: 28 Jul 2017 Last revised: 26 Oct 2017

See all articles by Johann Hattingh

Johann Hattingh

University of Cape Town (UCT) - Faculty of Law

Date Written: January 1, 2016

Abstract

This book chapter traces the events of 1914 that led to the imposition of income tax in South Africa. Based on historical records, it explains the economic and political circumstances that appeared to motivate the first Union government to introduce an income tax. General Jan Smuts, then Minister of Finance and Defence, played the central role in the lead up to and in the Parliamentary process to enact income tax. The enactment process was marked by two extraordinary features, namely that General Smuts convinced Parliament to approve an income tax without a Bill and, secondly, when a Bill was ultimately produced, a provision about the taxation of the mines was so controversial that it nearly brought the government down. The paper concludes with information about the success of the income tax in the first years, which was mainly owing to the willingness of a relatively small number of taxpayers in the upper income group to submit to income tax. One hundred years later the South African income tax is still noted for its extreme redistributive nature and small taxpayer base.

Keywords: Income Tax, Tax History, South Africa, Redistrubution, Jan Smuts

JEL Classification: K20, K30, K34, B10, B15, B31

Suggested Citation

Hattingh, Johann, On the Introduction of Income Tax in South Africa by Genl. JC Smuts: Three Eventful Months (24 April 1914 to 20 July 2014) (January 1, 2016). Published in J. Hattingh, On the Introduction of Income Tax in South Africa by Genl. JC Smuts: Three Eventful Months (24 April 1914 to 20 July 2014), In J. Hattingh, J. Roeleveld and C. West, eds., Income Tax in South Africa – The First 100 years, (2016) Juta & Co: Cape Town, 54-76, Available at SSRN: https://ssrn.com/abstract=3007051

Johann Hattingh (Contact Author)

University of Cape Town (UCT) - Faculty of Law ( email )

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