Commissioner’s Power to Address Tax Avoidance Schemes

What Has Changed?

The Finance Act, 2026 retained Section 18A of the Tax Procedures Act, giving the Commissioner powers to address arrangements designed to obtain undue tax advantages.

This provision strengthens the framework for dealing with tax avoidance schemes while introducing safeguards for taxpayers.

What Does Section 18A Provide?

1. Power to Disregard Tax Avoidance Arrangements

Where a taxpayer enters into an arrangement that is determined to be a tax avoidance scheme, the Commissioner may reassess the taxpayer’s liability as though the arrangement had not been undertaken.

2. What Is a Tax Benefit?

The provision covers arrangements intended to obtain tax advantages such as:

• Reducing tax liability.
• Delaying payment of tax.
• Obtaining tax refunds.

The law provides for a broad definition of both “scheme” and “tax benefit.”

3. Information Used to Identify Schemes

The Commissioner may rely on information from various sources, including:

• Tax returns.
• Audit findings.
• Electronic reporting systems.
• Other statutory disclosures.

This supports the identification and assessment of arrangements that may constitute tax avoidance schemes.

Important Taxpayer Safeguards

What Does This Mean for Taxpayers?

Tax planning remains an important part of business and financial management.

However, arrangements designed to obtain undue tax advantages may be examined under the anti-avoidance framework.

Businesses and individuals should:

• Maintain proper accounting records and supporting documents.
• Ensure transactions have a genuine commercial purpose.
• Review complex tax arrangements carefully.
• Seek professional tax advice where necessary.
• Consider private rulings for complex transactions where clarification is required.