Abstract provided by author
Section 95 (1) of the Income Tax Act 24 of 1981 is a section that underlies the general anti-avoidance tax provisions relating to our Act. The implication of this section has the result that a taxpayer who would want to avoid tax would not be able to do so in cases where the transaction, operation or scheme is of the nature that it is abnormal and the taxpayer has as his sole or main purpose the avoidance of tax that would otherwise have been payable. This provision differs from that of tax evasion, as tax evasion is illegal and subject to penalties in accordance with the Act. Tax avoidance, however, allows the taxpayer to arrange his affairs in such a manner that he would pay the minimal tax payable. The Secretary is given the power, in terms of s. 95 (1) to determine the taxpayers' liability for tax as if the scheme has not been entered into, or in any other manner he may deem appropriate to prevent the avoidance of tax
The conclusion that is to be reached in the discussion to follow relates to the fact that although tax avoidance is legal and acceptable, it is only considered to be so when the requirements in s. 95 (1) of the Act have not been met. When the Secretary is of the view that these requirements have been met, then he is empowered to determine the taxpayers liability for tax. Namibia has not yet encountered case law that relates to these provisions of s. 95 (1) and thus South African and English cases are of importance in this instance; although persuasive,they provide the guidelines needed in order to make these provisions applicable and persuasive inour jurisdiction. Further that the awareness of tax avoidance is not very high in the country and this relates to the fact that tax avoidance is a specified field of study, which only a few have the knowledge to understand.
