@guru, according to the Income Tax Act, companies are expected to pay out 60% of their operating income as dividends. If they have investment income, they are expected to pay the entire investment income as dividends. When a company pays less than the ratios stated, the Commish assumes that the ratios were paid as dividends and demands withholding tax.
Companies can appeal this, with acceptable excuses like lack of liquid cash, we have a capital project in the pipeline, we have a loan to pay, etc.

@jerry...
Bonus is extreme pimped up dividend!
Dividend is considered "wealth" when reinvested. otherwise it is an income to do with as you wish..eg consume..same as any other income.. dividend is just cash..dividend has value set by company

Bonus on the other hand..is like dividend..but in this case the dividend is in lots (shares) and the value is left to the market to determine..pricing of the shares once they are trading..

Dividend..company parts with cash.. Bonus.. company issues paper (Share certificates) but keeps the cash!!!..and the cash is tranferred from shareholder reserves to cash which now the company can play with.. but since you might make noise..they reward you the privilege of selling that "paper" they gave you instead of cash..to someone else..of course it will give you more in terms of cash..than had they gave you the cash..
hope am making sense.. tempted to explain in kikamba.

bonus is wealth..if it keeps earning value for you..capital appreciation..plus as a share it commnds diviidend for itself.. but if you sell off..they cease being wealth.