SARS tighten screws on tax evaders
THE South African Revenue Service (SARS), is tightening the screws on global tax evaders who hide or withhold information relating to undeclared offshore funds that lead to the fiscus losing billions of rands every year.
In a bid to try to root out global tax evasion, SARS embarked on a joint seminar with the Global Forum on Transparency and Exchange of Information for Tax Purposes and the African Tax Administration Forum (ATAF) to close all the gaps of tax evaders.
How successful SARS has been in reaching its revenue collection target of about R1.3 trillion will be known at the end of the 201718 financial year in March. South Africa is ranked higher than several developed countries in an assessment of money hidden in overseas bank accounts, reports shows.
Christian Freymeyer of the Financial Transparency Coalition (FTC) said in 2014 such money connected to South Africa was more than that connected to France, eight times higher than that of the US, and 3.5 times more than Spain.
In November more than 500 individuals and companies were named in the 13.4 million records exposed in the Paradise Papers, a trove of offshore tax haven leaks, raising afresh questions about the morality of tax avoidance, good governance, risk and efficient ways of structuring tax regimes.
Bluechip South African financial institutions named in the Paradise Papers included Standard Bank, Liberty, Sanlam and First National Bank. Investec also crops up as central to an investment which helped Shanduka, in which deputy president Cyril Ramaphosa was a shareholder until 2014, structure an investment in a Mozambican energy deal through Mauritius.
As a result, the SARS seminar vowed to look all gaps bringing together global tax experts, mostly from developing countries, to share insights and lessons on issues of beneficial ownership and exchange of information on tax matters.
There is no exact figure how much South Africa could be losing but roughly it is estimated more trillions per year to the illegal movement of money out of the country.
“The seminar is part of an effort to ensure participating tax authorities have the tools to adequately tackle tax evasion. Throughout the world, tax authorities are facing challenges to collect national revenues and ensuring everyone pays their rightful taxes in the global economic climate,” SARS said.
It stressed that in such a globalised world, it has become increasingly important for tax authorities to collaborate by sharing information.
“In specific cases, lack of information about ownership and control has enabled the illicit flow of funds from all countries, but particularly from the developing world,” SARS said.
South Africa has committed itself to the automatic exchange of tax information with revenue authorities of more than 50 jurisdictions under the Organisation for Economic Cooperation and Development’s common reporting standard.
TAX EVASION TACKLED: SARS has embarked on a joint seminar to close all the gaps exploited by tax evaders.