Unit 1: Financial Documents, taxation and tariff systems (Cont.)

Financial Documents

Financial documents include shopping documents and business documents. Any time that you go shopping, you should receive a till slip which shows what you have bought.  It is also proof that you have paid for the goods listed. For some items these should be kept for guarantee purposes. Many shops also allow you return goods as long as you have the till slip.
There are many different household bills or accounts. Click on the infographic below to reveal the examples:

Value Added Tax (VAT)

• an indirect tax on the consumption of goods and services in the economy
• Revenue is raised for government by requiring certain businesses to register and to charge
VAT on the supply of goods and services.
• VAT is presently levied at the standard rate of 15% on the supply of most goods and services
and on the importation of goods.
• There is a limited range of goods and services which are subject to VAT at the zero rate
• For example: Mr Smit bought goods for his shop and he paid a total of R12 345,67.
If all the goods included VAT, how much was the cost excluding VAT
Answer: R12 345,67 ÷ 115% = R10735,37

Income Tax

Income tax is the money paid to government from wages to pay for schools, hospitals, infrastructure etc.
• The amount of tax depends on:
✓ how much you earns
✓ your age
✓ whether you are a member of retirement annuity
• For example: The employee and employer each contribute 1% to UIF based on the total
remuneration of the employee. Calculate the monthly amount paid to the fund if the gross
salary of the employee is R12 3 456,78 per annum.
Answer: 2% × R12 3 456,78 = R2469,14 pa
Per month = R2469,14 ÷ 12 = R205,76

Tax Deductions

In the following interactive infographic, you can explore the different tax deductions:

Steps to calculating income tax

Medical tax credit

Medical credit: Is the fixed monthly medical rebate aimed at relieving personal tax; irrespective of the
income
• The more the number of dependents the higher the medical tax credit; the person’s tax bracket is not
considered.
• The medical credit depends on the number of dependents.
• Identify the number of members in the medical aid
• The medical credit allocated to the first dependent equals to that of the main member; there after the
medical credits of the remaining dependent is the same for every additional member. First means being
before all others with respect to time or order. i.e. anyone can be the 1st dependent, including
wife/husband, depending on the order in which the dependents are captured.
• Calculate the annual medical credits as they are given as monthly values on the tax table. This will
depend on the number of months the tax payer had contributed to the medical aid.

Type of tariffs

✓ Telephone tariffs (e.g. cell phone and fixed line)
✓ Municipal tariffs (e.g. electricity; water; sewage)
✓ Transport tariffs (e.g. bus, taxi and train tariffs)
✓ Bank fees.
• Telephone tariffs differ from one network to another one. The rates are charged either per minute
or per second. Promotional tariffs are different, this includes various packages which promotes
calling the same network. The rates are different during peak hours and off-peak hours.
• Electricity tariffs are charged per unit used. It also depends on the peak and off peak hours. The
rates of metered electricity and prepaid are different. Free units are given.
• Water tariffs are charged per kilolitre used, there are free kilolitres given and there after different
rates are charged. The more water you use, the higher the cost.
• Transport tariffs depend on the rates charged by service provider. Distance is used to charge the
tariffs. Regular users are discounted. Distance chart may be used to determine the cost if the rates
are charged per kilometre.