The analysis of the requirements of the new General Anti Avoidance Rules as compared to the repealed section 103(1)

Ngcobo, Nelisiwe Mukeliwe
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There is a constant struggle between the South African Revenue Services (SARS) and the taxpayer. SARS wants to collect as much money as possible from taxpayers; on the other hand, taxpayers want to pay as little tax as possible. The Government tries to implement new legislation and provisions in the Income Tax Act to make sure that taxpayers are restricted or limited in structuring their agreements in a way that reduces or limits their tax liabilities. On the other hand, taxpayers also try to find loopholes in the Income Tax Act that will work in their favour to reduce their tax liability. Most taxpayers structure their agreements in a way that ensures that they are still within the ambits of the provisions of the Income Tax Act but at the same time, mitigating their tax liability. It has been established over the years that taxpayers have a right to structure their financial affairs in a way that benefits them. This research paper will be looking at the requirements of the new General Anti Avoidance Rules (section 80A – 80L), compared to the now repealed anti-tax avoidance provisions of the old section 103 (1) of the Income Tax Act, which made a huge impact on this topic as most court cases used the interpretation of this section to reach judgments. The new anti-avoidance provisions are based on the important elements of the old provisions. This research report will analyse the General Anti-Avoidance Rules (GAAR) under section 80A to 80L of the Income Tax Act 58 of 1962. The aim is to analyze and conclude on the developments and effectiveness of the new GAAR in curbing tax avoidance.
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, 2022