Weaknesses in the legislation for tax avoidance and tax evasion in South Africa and suggested improvements

Naidoo, Katelynne Ann
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‘Tax avoidance and tax evasion threaten government revenues’ (OECD n.d.). As the globalization of domestic and international trade continually increases, tax evasion remains a hurdle for governments around the globe (OECD 2017a:9). Governments rely on tax collections primarily to finance economic expenditure; however, governments face a huge loss of revenue through tax evasion at different levels (OECD 2014:91). It is submitted that stringent tax collections are imperative for South Africa as a developing country. An examination of the difference between tax avoidance and tax evasion will be performed given that the difference is often perceived to be faint (Davidov 2016:1). The main aim of the study is to examine the weaknesses in the legislation for tax avoidance and tax evasion in SA and suggest improvements. An analysis of the role of the government, the Organisation for Economic Co-operation and Development (OECD), and other countries towards adopting a holistic approach to designing policies to prevent tax avoidance and tax evasion will be performed. Tax avoidance, harmful practices and aggressive tax planning must be tackled (African Tax Administration, African Union and OECD 2021:18).
A research report submitted partial fulfilment of the requirements for the degree of Master of Commerce to the Faculty of Commerce, Law and Management, Wits School of Accountancy, at the University of the Witwatersrand, Johannesburg, 2021