Turnover tax

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 who elect to pay the turnover tax are exempt from VAT. Turnover tax is at a very low rate compared to most taxes, but it is calculated on gross income without any deductions.[1]

In the Republic of 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 turnover tax and wholesale tax.[4][6]


  1. "Turnover Tax for Small Business". South African Revenue Service. Retrieved April 14, 2011.
  2. "Finance Act, 1963, Section 47". Irish Statute Book. Retrieved 17 November 2014.
  3. "Finance (No. 2) Act, 1966, Section 2". Irish Statute Book. Retrieved 17 November 2014.
  4. 1 2 "Revenue Over the Years 1959 - 1967". Revenue Museum. Dublin: Revenue Commissioners. Retrieved 17 November 2014.
  5. "Value-Added Tax Act, 1972". Irish Statute Book. Retrieved 17 November 2014.
  6. "Value-Added Tax Bill, 1971 (Certified Money Bill)  : Second Stage.". Seanad Éireann debates. Dublin: Oireachtas. 18 July 1972. Retrieved 17 November 2014.

See also

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