Abstract
History paints a picture of tax avoidance that has always plagued the tax man’s efforts in collecting taxes. The general anti-avoidance provisions (hereinafter referred to as the GAAR) has been refined since its inception in 1941 to its current form in 2006, in an effort to stay abreast of the ever-changing tax landscape. Tax avoidance schemes continue to persist in various sophisticated forms. To date, our tax authorities have been cautious in providing formal guidance on tax avoidance, which is perpetuated by the concern that any guidance provided may be abused by taxpayers and promoters by inducing the creation of more sophisticated schemes. Tax planning, avoidance and evasion will always remain a risk to the fiscus, but perhaps it is time for our tax administration to contemplate a different approach to combat tax avoidance. This study considers a progressive approach to counteracting tax avoidance by presenting a self-assessment GAAR framework to determine the levels of acceptability in relation to tax planning and avoidance arrangements. Admittedly, this approach requires a shift in the mindset of our tax administration by transitioning into a more service-oriented attitude and letting go of the inhibitions that this guidance will instigate in more sophisticated tax avoidance schemes. The study furthermore presents a journey beginning with the history of tax avoidance, continuing with a discussion of the differences between tax planning and tax avoidance, working through an analysis of the current GAAR rules and ending with the final arguments in supporting a self-assessment GAAR framework subject to certain requirements. Whilst it is acknowledged that the initiation, planning, design, and implementation of the recommendations provided will certainly be no easy feat; the conclusion drawn is that a self-assessment GAAR framework will fall within the primary objective of our overall self-assessment regime within which our law operates.
M.Com. (South African and International Taxation)