Sars gets R1bn boost from offshore assets

The South African Revenue Service (Sars) has collected slightly more than R1 billion from the Special Voluntary Disclosure Programme (SVDP) introduced in 2016.

Taxpayers with undeclared offshore assets and income were offered a window to come clean by voluntary disclosing tax and exchange control defaults.

Sars said in a statement released on Tuesday that more than 2 000 made use of the programme, which has assisted the revenue service in collecting more than R1 billion in revenue. The total tax liability stands at R1.18 billion.

Finance minister Malusi Gigaba estimated the potential tax income from the SVDP at R4 billion.

Keith Engel, CEO of the South African Institute of Tax Professionals, said the number was collected from a few big players who came forward. “That said, the take-up probably could have been higher. The new regime was more complex, requiring more paperwork.”

Engel said it was questionable whether Sars had the capacity to enforce and uncover “hidden” offshore savings. However, the exchange of information networks among countries are growing in effectiveness. This will assist Sars in finding undeclared assets and income.

Those who have not applied for offshore tax relief can still do so under the Voluntary Disclosure Programme (VDP) process.

Sars said the collected revenue provides a boost to Sars’ revenue purse “in a difficult economic period” and will assist the country in its socio-economic development.