According to SARS, the revised proposals are based upon the public comments and extensive discussions with international experts stemming from a consultation which commenced in November 2005.

While in some cases, the original proposals have been retained, several new provisions are being introduced, including the introduction of a new economic substance test, under which all avoidance transactions will have to have a commercial purpose other than avoiding tax.

SARS says that the revised proposals have made a number of concessions in response to criticism. The revised proposals would reduce the original abnormality factors from eleven to five, refocus the remaining ones on arrangements lacking commercial substance, and provide additional guidance on their scope.

However, the agency conceded that "an unavoidable side effect" of some of these concessions has been an increase in the length and complexity of some provisions. In order to mitigate this side effect, the revised proposals have adopted a multi-section approach using shorter sentences and simpler language to the extent possible.

The revised draft amendment to section 103 of the Income Tax Act will be included in the Revenue Laws Amendment Bill, which is expected to be tabled in Parliament this year.