Determining VAT Avoidance or Tax Evasion in Brown Investments Ltd Case

1. Summative Assessment 2 (SA 2) must be submitted online on or before the 29th of November 2021.

2. The essay must be a minimum of 600 (six hundred) words, and should not exceed 750 (seven hundred and fifty) words.

 

3. The essay structure must be as follows:

 

Cover Page:

• Name
• Surname
• Student Number
• Name of your Support Centre (i.e. Boston, Braamfontein)

Introduction: Tells the reader what the essay is about.

 

Body / Main Content: Is based on research and relates to the essay question or topic that has been set.

 

Conclusion: Is a summary of what has been covered in the essay, it may also include suggestions / recommendations.

 

Reference list: (not included in the word count): the Harvard Referencing Method must be adhered to with regards to in-text citations and the reference list.

 

Please make sure you read and adhere to Boston’s Harvard Method of Referencing: A Beginner’s Guide when referencing, as well as The Beginners Guide to Plagiarism, both are available in the HE Library module on ColCampus.

4. The essay must be typed, using the following format settings only:

• Font: Arial
• Font Size: 12
• Line Spacing: 1.5

5. For this assessment the following must be adhered to:

You have been provided with xx (x) academic source (see below) this source is compulsory and must be consulted and referenced when answering the research question.

 

The compulsory source(s) must be accessed using the HE Library module on ColCampus unless otherwise stated e.g. through a hyperlink.

 

Compulsory source(s) to use:

Musviba, N. 2021. Tax Avoidance and Tax Evasion – the differences. South African Tax Guide. Available at: https://www.sataxguide.co.za/tax-avoidance-and-tax-evasion-thedifferences/ [Accessed 1 July 2021].

 

6. Academic sources and accessing credible e-Resources:

 

Not all sources / texts can be classified as academic sources. Wikipedia, for example, is not a credible academic source since authors are not identifiable, and editing an article on this site is very easy. Also, blog posts often provide valuable information, but are not academically sound.

To judge whether a source is credible, consider the following criteria:

• The author should be identifiable through author information, affiliations, and/or qualifications.
• An academic source has usually been peer-reviewed.
• Academic textbooks or academic journals should be published by a recognised authority/publisher like a university, an academic publishing house, research organisation etc.
• A list of references should be present, that is, full citations for sources used. Thorough reference to research is a crucial characteristic of legitimate academic work

7. You must make use of the Harvard Method of Referencing. Refer to the examples of referencing below:

Book, single author:

Holt, D.H. 2017. Management principles and practices. Sydney: Prentice-Hall.

Book, 2 or 3 authors:

McCarthey, E.J., William, D.P. & Pascale, G.Q. 2017. Basic marketing. Cape Town: Juta.

 

Book, more than 3 authors:

Bond, W.R., Smith, J.T., Brown, K.L. & George, M. 2016. Management of small firms.

Sydney: McGraw-Hill.

Book, no author:
Anon. 2009. A history of Greece. Athens: Cengage.

Essay structure

eBook:
Case, J., Marshall, D. & McKenna, S. 2018. Going to university: The influence of higher education on the lives of young South Africans [E-book]. Cape Town: African Minds.

Retrieved from https://www.africanminds.co.za/wpcontent/uploads/2017/06/9781928331698_web.pdf

 

Academic journal article with one author:
Waghid, Y. 2019. On the polemic of academic integrity in higher education. South African Journal of Higher Education, 33(1):1–5.

Academic journal with 2 or more authors:
Waghid, Y. & Davids, N. 2019. On the polemic of academic integrity in higher education.

South African Journal of Higher Education, 33(1):1–5.

Newspaper article from a webpage:
Motshwane, G. 2019. A missed opportunity: Shakes slams Bafana's Afcon plans. Sowetan Live, 7 June. Retrieved from https://www.sowetanlive.co.za/sport/soccer/2019-06-07-amissed-opportunity-shakes-slams-bafanas-afcon-plans/ [Accessed 8 June 2019].

Court case:
Gold Circle (Pty) Ltd v Maharaj (1313/17) [2019] ZASCA 93 (3 June 2019).

 

Web based images (figures, graphs, maps, artwork):

Boston City Campus & Business College. 2019. Welcome [Image]. Retrieved from https://www.boston.co.za/ [Accessed 3 June 2019].

Music or recording:

Makeba, M. 1960. The Click Song [Recording]. YouTube. Retrieved from https://www.youtube.com/watch?v=Qg4Fp-A7IRw [Accessed 8 June 2019].

Chapter in an edited book (collected work):

Velez, C. 1978. Youth and aging in central Mexico. In B. Myerhoff & A. Simic (eds.). Life?s career-aging: Cultural variations on growing old. San Francisco, CA: Sage, 107–162.

8. Boston expects you to approach your work with honesty and integrity. Honesty is the basis of respectable academic work. Whether you are working on a formative assessment, a project, a paper (read at a conference), an article (published by a journal), or a summative assessment essay, you should never engage in plagiarism, unauthorised collaboration (collusion), cheating, or academic dishonesty Plagiarism occurs when a writer duplicates another writer's language or ideas, and then calls the work their own. Simply put, plagiarism is academic fraud. This includes the ‘copy and paste’ of work from textbooks, study guides, journal articles, etc. The Plagiarism Declaration, included in this assessment brief, must be signed and attached to the front of your essay. Refer to the Plagiarism Information Sheet in your Course Outline for further information.

9. To obtain maximum results, please consult the rubric included in this brief to ensure that you adhere to and meet all the given criteria.

Brown Investments Ltd, is a company based in East London. It has a financial year end of 30 August. At its annual general meeting (that took place in July 2021), the shareholders of Brown Investments Ltd appointed Eagle-Eye Inc. as its external auditor. During the current audit of Brown Investments Ltd.’s financial statements one of the audit team members discovered that taxable income is understated by the Senior Accountant Mr. Hustler, due to a certain amount of the sales having been fraudulently not recorded. Further investigations conducted pointed out that Mr. Hustler deliberately failed to report output tax and he was also underreporting input tax.

Mr Hustler was also in the habit of underpaying tax as he thought the government was corrupt and paying tax was a waste of valuable company resources, he opted to increase the salaries of his employees as he felt it was the moral thing to do. The auditors felt that Mr. Hustler’s actions resulted in material understating of the VAT liability that would have been paid to SARS.

Determine whether it is VAT avoidance or tax evasion that exists in the above case. Support your answers by linking with practical examples motivating why the case constitute tax evasion or VAT avoidance.