The impact of the taxation of dividends on the dividend policy of South African companies
Thesis (MBA)--Stellenbosch University, 2008.
This study investigated whether the way in which dividends are taxed in South Africa, with the introduction of Secondary Tax on Companies (STC) in 1993, together with the extensive piece of legislation which incorporates dividends, has a negative impact on the total amount of dividends paid by companies listed on the Johannesburg Stock Exchange for the period from 1993 to 2006. The Wilcoxon Signed Ranked test was employed to compare the difference in total dividends declared, effective from 1993 and repeated for 1995. The results of the negative differences in proportion to the positive differences measured were then compared to the size of STC applicable in 1993 and 1995. The results of the comparison were that STC had no negative effect on the total dividends paid on the companies used in the sample and the majority of companies constantly increased dividend payments. The study did not distinguish between the different origins of dividends as research advises that the origins of dividends have changed during the increase and decrease of STC. It does seem that total dividends declared are increasing.