This article argues that, for purposes of the Income Tax Act 58 of 1962, Bitcoin and cryptocurrencies operating in a like manner are incorporeal property with a comparable value in real currency. The fundamental basis for the advancement of the hypothesis that such cryptocurrencies give rise to protectable proprietary rights are: (i) the rights exist digitally in cyberspace; (ii) the rights have value to their users; (iii) the rights are capable of being owned as cyberproperty; (iv) the rights can be transferred electronically by a possessor of a unique public-private cryptography protected keypair, and (v) the rights can be proved by entries in a digital ledger that records the historical chain of ownership transfers. This article argues further that the average, fair market value of the cryptocurrency in South African Rands on the date of its receipt or accrual as a revenue asset must be included in a taxpayer's gross income. It is further argued that this value ought to be the average price of the cryptocurrency determined with reference to at least two pricing indices commonly used or accepted in the marketplace.
Western Cape OPSOMMING Die Wet op Belastingadministrasie Openbare finansies is noodsaaklik vir doeltreffende bestuur ter vestiging van wet en orde, vrede en voorspoed, fasilitering van die heropbou-en herontwikkeling van nasionale infrastruktuur, en die verstrek van toegang tot sosiale goedere. Doeltreffende en effektiewe belasting administrasie is 'n noodsaaklike pilaar van 'n moderne, demokratiese staat. Hierdie artikel toon dat die Belasting Administrasie Wet 28 van 2011, op die keper beskou, gemik is op die bevordering van die openbare belang. Die kern van sy doelstellings is om seker te maak die doelmatige en doeltreffende invordering van belasting geskied. Hierdie doel is versoenbaar met die Grondwetlike doel van doeltreffendheid in openbare administrasiewaarvan belasting administrasie 'n integrale deel vorm. Verder is die doelstellings van die Wet op Belasting Administrasie konsekwent met die Wet op die Suid-Afrikaanse Inkomstediens, 34 van 1997 wat meld dat SARS se doelwit die effektiewe en doeltreffende invordering van belasting is. Die Wet op Belasting Administrasie bevorder sodoende die Grondwet se onderliggende doelstellings. Dit is duidelik sigbaar daarin dat hierdie Wet gerig is op die verseker van voldoende openbare hulpbronne vir gebruik in die openbare voordeel. Hoewel hierdie strewe 'n legitieme regeringsdoel is, bly elke bepaling in die Wet nogtans onderhewig aan 'n ondersoek van rasionaliteit en, dus, geldigheid.
Section 39(2) of the Constitution of the Republic of South Africa, 1996 directs that when any legislation is interpreted, the result must be a construction that promotes 'the spirit, purport and objects of the Bill of Rights'. The Constitution omits defining the contours of this phrase. Its precise meaning has also not been the subject of a comprehensive exposition by South African courts. Thus, uncertainty exists as to the exact import of this imprecise, somewhat vague phrase. What is clear is that the Constitution differentiates between the 'spirit', the 'purport' and the 'objects' of the Bill of Rights. Therefore, they must bear different meanings for its purposes. The absence of a definition that demarcates the scope and ambit of these constitutional imperatives increases the difficulty in applying them, particularly also because they may mean different things to different people. To ensure legal certainty, a tenet of the rule of law, it is important to develop a common understanding of the 'spirit', purport and objects of the Bill of Rights' and of that which must be fostered or advanced ('promoted'). However, as this article will demonstrate with reference to judicial precedent and relevant legal cum constitutional principles, they do not lend themselves to easy interpretation. This probably also explains the absence of a fixed definition thereof in SA's constitutional architecture and jurisprudence. Hence, this article does not seek to, nor will it, carve out a finite definition of the constituent elements at the epicentre of the interpretive directive in section 39(2) of the Constitution.
Taxation of legal costs in the high courts of South Africa is a quasi-judicial proceeding during which a Taxing Master assesses the fairness of a bill of costs, quantifies the amount payable to a cost creditor, and issues an allocatur which certifies the sum payable by a cost debtor. It is argued that this legal process, which is regulated by Uniform Rule 70 read with Uniform Rule 69, implicates a cost debtor’s fundamental right, under s 34 of the Constitution of the Republic of South Africa, 1996, to fair dispute resolution at any independent forum. In terms of Uniform Rule 70(3B) (a), prior to the enrolment of a bill for taxation, a cost debtor is entitled ‘to inspect such documents or notes pertaining to any item on the bill’. This article argues that the inspection envisaged is a pre-taxation discovery procedure aimed at enabling a cost debtor to determine which items on a bill of costs are objectionable, and the grounds therefor. With reference to relevant judicial precedent and the established principles of interpretation, this article hypothesises that, having regard to the clear, unambiguous, peremptory language of Uniform Rule 70(3B)(a), as well as the purpose sought to be achieved by the right of inspection, the law has, in this context, excluded the operation of the cost creditor’s common-law right to assert legal professional privilege as regards documentation pertaining to any item claimed in the bill of costs. This is unlike the position prevailing at a pre-trial discovery procedure catered for in Uniform Rule 35. This article also argues that, in accordance with s 39(2) of the Constitution, the broad construction of the right of inspection under Uniform Rule 70(3B)(a) advanced here promotes both a cost debtor’s fundamental right in s 34 of the Constitution, and the values of justice and the rule of law which are deeply imbricated in the Bill of Rights.
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