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Synopsis
A monthly journal, published by PwC South Africa, that gives informed commentary on current developments in the tax arena, both locally and internationally.
Through analysis of and comment on new laws and judicial decisions of interest, Synopsis helps executives to identify developments and trends in tax law and revenue practice that may affect their business.
In this edition:
Synopsis Tax today - January 2026
Ahead of the National Budget, our first article interrogates the structural evolution of personal income tax ('PIT'), the government's largest and most stable revenue source, and challenges the myth that PIT rates have been declining since the 1990s. With the budget under constant pressure, the article argues that misdiagnosing how much individuals are truly paying distorts public debate about fiscal sustainability and fairness, demonstrating instead how base-broadening and fiscal drag have quietly pushed South Africa's PIT burden to record levels.
Our second article unpacks a recent general anti-avoidance rule ('GAAR') case through the lens of the 'but for' test, under the 'tax benefit' requirement of the GAAR. With competing views on how the test should apply, the court opted for a broader counterfactual analysis, comparing the taxpayer’s tax-exempt dividend receipts with the likely taxable alternative of fees or commissions, and found that a tax benefit arose 'but for' the chosen structure. The article highlights current uncertainty as to the correct application of the test and urges practitioners to exercise caution in this area.
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