Abstract:
Tax lottery systems have been implemented globally as a strategy by authorities to improve
tax compliance and increase tax revenues. In this study the implementation of a tax lottery
system in South Africa was investigated by considering the perspectives of South African
consumers and small business owners. A questionnaire was distributed to a sample of
consumers and small business owners to determine their preferences, attitudes and
concerns regarding the implementation methods and administration of a possible tax lottery
system in South Africa.
Statistical analyses were performed on both qualitative and quantitative data that were
obtained from the distributed questionnaire. The results of the qualitative data obtained from
the consumer group showed that participants preferred a mobile application as an
implementation method. Although, this preference differed between participants within the
lowest income group and the older age groups: these participants were inclined to prefer a
drum-based implementation method. Participants within the lower income group also tended
to disagree with statements that measured the likelihood that they would use a mobile
application to participate in a tax lottery. From the results obtained from the small business
owner group, only 51% of the participants surveyed indicated that they would support a tax
lottery system. The majority of the unregistered participants indicated that a tax lottery
system would not motivate them to voluntarily register for tax. Although the vast majority of
small business owners surveyed indicated that they would be able to supply receipts to their
customers on a regular basis, small business owners that have been in operation for less
than a year as well as those that were currently not issuing receipts, tended to disagree with
statements which measured their capability of issuing receipts. The biggest concern among
the consumer and supplier groups was that corruption and fraud may be present when a tax
lottery is implemented in South Africa.
This study contributes to the knowledge on tax lotteries by specifically focussing on the
implementation of such a lottery in a developing country, whereas existing research has
mostly focussed on tax lotteries implemented within European countries. The study
specifically analysed whether a mobile application would be effective to facilitate such a tax
lottery and determined whether it would be supported by South Africans. Finally, the findings
of this study provide insights from the perspectives of both consumers and small business
owners regarding the effective design and implementation of a possible tax lottery system
within the South African environment.
