The Effectiveness of Section 80A of the South Africa Income Tax Act
Enowkenwa, Rawlings Obenembot
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This study was undertaken to establish the effectiveness of the current Section 80A-80L of the General Anti-Avoidance Rule (GAAR) of the South African Income Tax Act No-58 of 1962, in combating tax avoidance schemes. Tax avoidance is a key contention of the South African Revenue Service (SARS) and other tax authorities. This research report will examine the effective application of the impermissible tax avoidance provision regarding the meaning of a tax benefit, substance over form and stimulated transactions as well as the sole or main purpose of taxpayers entering into transactions. The results indicated that the provision of the GAAR on the meaning of a significant tax benefit in the tax legislation has left room for the taxpayer to successfully argue on what constitutes a significant tax benefit and so there is a need for an interpretation not to further guide the tax authorities as well as taxpayers on the quantitative meaning of these terms.