2.1 State the beginning and end dates of a tax year - NSC Consumer Studies - Question 2 - 2018 - Paper 1
Question 2
2.1 State the beginning and end dates of a tax year.
2.2 Name the institution that collects tax.
2.3 Name the TWO types of direct income tax.
2.4 Read the scenari... show full transcript
Worked Solution & Example Answer:2.1 State the beginning and end dates of a tax year - NSC Consumer Studies - Question 2 - 2018 - Paper 1
Step 1
2.1 State the beginning and end dates of a tax year.
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Answer
The beginning date of a tax year is the 1st of March, and the end date is the 28th (or 29th in a leap year) of February.
Step 2
2.2 Name the institution that collects tax.
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The institution that collects tax is the South African Revenue Service (SARS).
Step 3
2.3 Name the TWO types of direct income tax.
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The two types of direct income tax are:
Pay as you earn (PAYE)
Provisional tax.
Step 4
2.4.1 Define the term inflation.
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Inflation is defined as the average increase in prices of goods and services in a year within a country. It reflects the diminishing purchasing power of money.
Step 5
2.4.2 Name the instrument that is used to determine the inflation rate.
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The instrument used to determine inflation is the Consumer Price Index (CPI).
Step 6
2.4.3 Explain why it is better for David to have a fixed interest instead of a fluctuating interest on his study loan.
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Having a fixed interest means that the interest rate remains consistent throughout the loan period, which aids in budgeting as David can predict his monthly payments. In contrast, a fluctuating interest rate could lead to increased payments if rates rise, making it harder for him to manage his finances during periods of inflation.
Step 7
2.4.4 Discuss why David bought the bed on an instalment sale transaction and the television on a lay-by agreement.
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David bought the bed on instalment because he needed it immediately for comfort, and could afford a deposit. The lay-by for the television allows him to reserve it while paying it off, ensuring he has the means to manage his budget without immediate full cash payment.
Step 8
2.5 Discuss the interrelationship between the value of money, inflation and the South African Reserve Bank.
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The value of money is affected by inflation, as rising prices decrease its purchasing power. The South African Reserve Bank monitors inflation rates and can adjust interest rates to influence economic stability. Higher inflation rates typically lead to lower money value, affecting consumers' purchasing behavior and overall economic health.
