Gov­ern­ments have ways to track down tax evaders

Pretoria News Weekend - - OPINION -

THE PANAMA Pa­pers and, more re­cently, the Par­adise Pa­pers have been cause for a few wor­ried brows among peo­ple with off­shore in­vest­ments. In­di­vid­u­als who have used off­shore ju­ris­dic­tions such as Jersey, Guernsey and Mau­ri­tius to evade tax have been ex­posed, of­ten re­veal­ing com­pli­cated webs of off­shore com­pa­nies.

At an in­vestor meet­ing in Cape Town this week, Michael Yuille, the manag­ing di­rec­tor of North­ern Cross Wealth Man­age­ment, said that, through the Com­mon Re­port­ing Stan­dards (CRS), gov­ern­ments and tax au­thor­i­ties can find out whether lo­cal tax res­i­dents have un­de­clared as­sets out­side their coun­try of res­i­dence.

In­for­ma­tion about off­shore bank ac­counts, share port­fo­lios and other in­vest­ment ve­hi­cles is au­to­mat­i­cally shared among coun­tries reg­is­tered with the CRS, which was de­vel­oped by the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment.

Yuille said se­vere penal­ties can be ap­plied to of­fend­ers, who can also face crim­i­nal pros­e­cu­tion. All as­sets should be de­clared, and in­vestors must clar­ify their tax sit­u­a­tion with the rel­e­vant au­thor­i­ties and be tax­com­pli­ant.

“The fi­nan­cial world is get­ting smaller. The CRS (and the For­eign Ac­count­ing Tax Com­pli­ance Act) are in place to en­able au­thor­i­ties to stop tax eva­sion, fi­nan­cial crime and ter­ror­ism fund­ing. In­vestors need to take their tax af­fairs se­ri­ously and make sure their off­shore hold­ings are above board,” he said.

With the govern­ment un­der pres­sure to gen­er­ate rev­enue from ci­ti­zens and res­i­dents, the CRS has be­come a crit­i­cal game-changer of which all in­vestors should be aware, he said. – Staff Re­porter

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