Abstract:
Taxpayers are often confronted with an avalanche of taxes as a result of the numerous taxes which affect their income. Despite how lucrative a business venture may be, it can be undesirable for taxpayers to pursue such a business because of the tax-laden system supervening these transactions. On the one hand, SARS is mandated to ensure that state revenue is generated, which is used toward ensuring basic services and amenities for citizens. On the other, regardless of the numerous taxes imposed on taxpayers’ investments, taxpayers are entitled and empowered to arrange their affairs, to attract less tax liability. In the same vein, laws regulating tax avoidance, including the General Anti-Avoidance Rules (GAAR), as envisioned in section 80A-L of the Income Tax Act, aim to deter taxpayers from aggressively avoiding taxes. Whether these tools are sufficiently effective to combat tax avoidance is questionable as they have not been extensively been used.
Having regard to the conflicting interests of the taxpayer’s right to avoid taxes versus SARS’s mandate to generate state
