Turnover tax explained

A turnover tax is similar to VAT, with the difference that it taxes intermediate and possibly capital goods. It is an indirect tax, typically on an ad valorem basis, applicable to a production process or stage. For example, when manufacturing activity is completed, a tax may be charged on some companies. Sales tax occurs when merchandise has been sold.

By country

In South Africa, the turnover tax is a simple tax on the gross income of small businesses. Businesses that elect to pay the turnover tax are exempt from VAT. Turnover tax is at a very low rate compared to most taxes but is without any deductions.^[1]

In Ireland, turnover tax was introduced in 1963^[2] and followed by wholesale tax in 1966.^{[3] [4]} Both were replaced in 1972 by VAT,^[5] in preparation for Ireland's accession to the European Communities, which prohibited both taxes.^[6]

See also

• Cascade tax
• Goods and Services Tax
• Gross receipts tax
• Sales tax
• Turnover tax in the Soviet Union
• Value-added tax

Notes and References

1. Web site: Turnover Tax for Small Business. South African Revenue Service. April 14, 2011. dead. https://web.archive.org/web/20110429200233/http://www.sars.gov.za/home.asp?pid=43122. April 29, 2011.
2. Web site: Finance Act, 1963, Section 47. Irish Statute Book. 17 November 2014.
3. Web site: Finance (No. 2) Act, 1966, Section 2. Irish Statute Book. 17 November 2014.
4. Web site: Revenue Over the Years 1959 - 1967. Revenue Museum. Revenue Commissioners. 17 November 2014. Dublin.
5. Web site: Value-Added Tax Act, 1972. Irish Statute Book. 15 February 2017.
6. Web site: Value-Added Tax Bill, 1971 (Certified Money Bill): Second Stage.. 18 July 1972. Seanad Éireann debates. Oireachtas. 17 November 2014. Dublin.