Explain the tax implications on any 2 investment instruments with reference to capital growth, income deductions and exemptions.

Question 9:
Here are the tax implications for two investment instruments:

• Shares (Equities):

  • Capital Growth: When shares are sold for a profit, the gain is subject to Capital Gains Tax (CGT). A portion of this capital gain is included in the investor's taxable income.
  • Income: Dividends received from shares are subject to Dividends Withholding Tax (DWT) at source. The net dividend received by an individual is generally exempt from normal income tax.
  • Deductions and Exemptions: Investors typically receive an annual capital gains exclusion amount, meaning a certain amount of capital gain is exempt from CGT each year.

• Retirement Annuity (RA):

  • Capital Growth: The growth (capital gains, interest, dividends) within a retirement annuity fund is generally exempt from tax while the funds remain invested.
  • Income: Contributions made to a retirement annuity are tax-deductible from the investor's taxable income, up to certain limits, reducing their overall tax liability.
  • Deductions and Exemptions: Contributions are deductible. The investment growth is tax-exempt. Upon retirement, withdrawals are taxed according to specific retirement tax tables, with a portion often being tax-free.

Question 10:
The Triple Bottom Line (TBL) reporting, as emphasized by the King Report for listed companies, requires businesses to report on their performance across three dimensions: People, Planet, and Profit. This goes beyond traditional financial reporting to include social and environmental impacts. The "People" aspect refers to the company's social performance, including its impact on employees, customers, and communities. "Planet" refers to the environmental performance, such as resource consumption, waste management, and carbon footprint. "Profit" represents the traditional economic value created. The King Report advocates for integrated reporting, where these three aspects are reported together to provide a holistic view of a company's sustainability and value creation.

Question 11:
Two internationally accepted principles that could form the basis of a good code of conduct for internal business purposes are:

• Integrity: This principle emphasizes honesty, trustworthiness, and adherence to strong moral and ethical principles in all business dealings and decisions. It ensures that employees act with sincerity and transparency.
• Respect: This principle requires treating all individuals, including colleagues, customers, and stakeholders, with dignity, fairness, and consideration, valuing their diverse perspectives and contributions.