n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - Securing tax exemption for the income of a public school and the tax deductibility of donations to the school : navigating the maze of South Africa's Income Tax Act : analysis

Volume 26, Issue 2
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



Most income tax systems recognise that certain income should be exempt from tax, for example, income earned by what may loosely be called 'charitable' undertakings and used to finance their activities. Naturally, tax legislation in this regard has to be tightly drafted so as to ensure that only bona fide charities qualify for tax exemption, and that charities do not exploit their tax-exempt status to engage in extraneous commercial activities and thereby earn undeserved tax-free income. Tax legislation also tries to thwart attempts by commercial entities to disguise themselves as charities and thereby gain tax exemption for their income. Tax-avoidance stratagems involving tax-exempt charities affect revenue collection by the fiscus.

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