SARS tighten screws on tax evaders

The New Age (Western Cape) - - Business - BERNARD SATHEKGE bernards@the­newage.co.za

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.

PIC­TURE: GETTY IMAGES

TAX EVA­SION TACK­LED: SARS has em­barked on a joint sem­i­nar to close all the gaps ex­ploited by tax evaders.

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