Tax avoidance, enforcement, and compliance: contemporary challenges for tax administrations

Abstract

In recent years, tax law has faced growing challenges arising from the increasing complexity of global economic transactions, the expansion of international anti-avoidance standards, and the pressure on tax administrations to secure revenue. These developments have called into question the balance between the State’s taxing power and taxpayers’ legal certainty, especially when legitimate planning decisions are interpreted as abusive schemes.

In this context, Dr. Jacques Malherbe offers a reflection grounded in his extensive academic trajectory, analyzing the need to clearly distinguish between lawful tax planning and artificial arrangements. He also examines the role of General Anti-Avoidance Rules (GAARs) and the Principal Purpose Test (PPT), warning that their indiscriminate application may generate uncertainty and affect genuine transactions, even in cases of double non-taxation that may be legitimate.

Finally, Malherbe expresses concern over the growing expansion of sanctioning mechanisms and criminal tax law, noting that their excessive use may distort the essential function of the system, which is rooted in the principle of ability to pay.