Page 18 - Test 1 Slides - 1. Introduction & Application Of Legislation

INTRODUCTION & APPLICATION OF LEGISLATION

Interpretation rules

• When interpreting the wording used in the Income Tax Act:

• Take note of the real intention of the legislator – when a provision is
introduced to the Income Tax Act for the first time it is usually
discussed in an explanatory memorandum. This explanation will
generally give the intention of introducing the provision, which, in turn,
will indicate the intention of the legislator. The purpose behind the
words must after all be determined.

• Apply the contra fiscum rule. This rule provides that where a provision
of the Income Tax Act has two interpretations, the court will interpret
the provision in terms of the interpretation that places the smaller
burden on the taxpayer.

• In light of the above “tips” on interpreting legislation, you need to
remember that hardship is not an excuse or a way out. Even if a
provision leads to hardship for a taxpayer, it cannot be interpreted
differently in order to alleviate that hardship.

• The laws of interpretation will not solve all disagreements between
SARS and taxpayers and often the disagreement must be fought on the
legal stage.

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