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
State the beginning and end dates of a tax year.
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Answer
The tax year in South Africa begins on 1 March and ends on 28 (or 29) February of the following year.
Step 2
Name the institution that collects tax.
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Answer
The institution responsible for collecting tax in South Africa is the South African Revenue Service (SARS).
Step 3
Name the TWO types of direct income tax.
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Answer
The two types of direct income tax are:
Pay as you earn (PAYE)
Provisional tax
Step 4
Define the term inflation.
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Inflation is defined as the average increase in prices of goods and services in a given year or country, reflecting the decrease in the purchasing power of money.
Step 5
Name the instrument that is used to determine the inflation rate.
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Answer
The Consumer Price Index (CPI) is the instrument used to determine the inflation rate.
Step 6
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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Answer
Having a fixed interest rate means that David's repayment amount will remain constant over time. In contrast, a fluctuating interest rate can lead to unexpected increases in monthly payments, making it harder for him to budget effectively and plan his finances.
Step 7
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 through an instalment sale because he required immediate use of it. The lay-by agreement for the television allowed him to secure the item while making payments over time, aligning with his budgetary limitations. This way, he could manage his finances more effectively and ensure that he did not overspend.
Step 8
Discuss the interrelationship between the value of money, inflation and the South African Reserve Bank.
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Inflation affects the purchasing power of money, causing prices to rise and making money less valuable. The South African Reserve Bank plays a crucial role in managing inflation through monetary policy. By adjusting interest rates and controlling the money supply, the Reserve Bank aims to stabilize the economy and mitigate the impact of inflation on consumers.
