There is no prohibition in South African tax law on minimizing your tax payable. The principle is actually well part of our common law. We have a section enacted in our Income Tax Act that deals with transactions that are solely entered into for the purposes of tax evasion. However, SARS has lost a couple of cases on when applying this section as tax saving plans often passes a business or substance test. In the 2005 Budget Speech it was announced that the anti-avoidance section may be re-drafted to give it more teeth.

Proper tax planning is not something that one can really do when you submit your tax return. People who really save a lot of tax are those that consider the tax consequences of every transaction or investment they make. It is a continuing process and the help of a knowledgeable tax advisor can really save you money.