Tax Mitigation versus Tax Evasion
Lets face it, no one wants to pay more tax than they have to. But where do you draw the line?
There are two terms that play a role here, Tax Mitigation and Tax Evasion, and there is significant difference.
Tax Mitigation: is generally a term used when you apply good tax planning practices to legally reduce your tax liability. In other words, you structure your affairs to pay the minimum legally required amount of tax. This can include utilising tax deductible expenses like provident fund contributions, medical aid tax credits and any other allowable deductions.
Tax Evasion: on the other hand is when you apply illegal practices to avoid paying taxes. This usually entails deliberately misrepresenting the true facts of your affairs. This can include under declaring your income or overstating your deductions.
In summary, you may utilise legal avenues and plan and structure your affairs, to ensure that you are not paying more tax than what is legally required of you.
It is always advisable that you talk to a qualified and registered tax practitioner to assist you when doing your tax to ensure that you tax liability is both optimal and legal.