Tax Avoidance vs. Tax Evasion

Tax avoidance means to legally minimise your tax liability while disclosing all relevant information to SARS.

In this course, we aim to give you a basic understanding of personal income tax in South Africa. This will give you the tools to legally minimise your tax bill in future.

A basic example of tax avoidance, which you will learn more about later in this course, is to invest in an ETF in a tax-free savings account rather than to invest in the equivalent ETF without the tax-free benefits.

Another of tax avoidance example is to ensure that you make use of all available deductions to minimise your tax liability – we also look at this later in the course.

Tax evasion is when you use dishonest, illegal means to pay less tax than what you ought to.

An example of tax evasion is to not declare income that you have received in your tax returns.

Tax evasion is a criminal offence and may lead to a criminal record, fines and imprisonment!