Page 20 - Donation Tax & VAT class slides

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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