A comparative evaluation of the South African tax regime for investments using trusts (R-9881)

All countries are dependent on the revenue derived from taxation. In the case of developing countries, this is even more important since taxation forms the primary income stream in the majority of cases. Similarly, it is developing countries that are the most significantly affected by tax avoidance or tax evasion practises. One of the reasons can be attributed to the large dependence on tax revenue on the low tax base. One possible solution that can contribute to addressing problems related to tax avoidance and tax evasion for a developing country such as South Africa, is curbing capital outflows and tax avoidance. One mechanism that can be used to achieve this, is to ensure that the correct tax policies are in place. A widely used entity for investment purposes, is the trust. One of the reasons for the popularity of the trust, can be attributed to the flexibility and versatility that it offers. If the South African tax framework regarding trusts can be changed to prevent the rapid outflow of capital, while simultaneously creating a conducive environment for investment to flourish, South Africa will be able to greatly strengthen its tax base and secure economic growth. Therefore, the research aims - from a comparative tax law perspective - to formulate suggestions as to how and where the South African tax regime towards trusts could be improved by creating a tax framework that will encourage investment, thereby taking into consideration South Africa's unique context and challenges.

Keywords:Administrative Law

Disciplines:Corporate law, Economic, commercial and financial law, Tax law

Project type:Collaboration project