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Finance Minister Pravin Gordhan.
South Africa is tightening up on tax evasion as part of measures to
reach its target of collecting R1.169 trillion in the 2016-2017 financial year.
This comes after the recent Panama Papers tax evasion exposé, which
included allegations that President Jacob Zuma’s nephew Khulubuse Zuma had also
squirreled money into a tax haven.
At the height of the international scandal, the Iceland Prime
Minister Sigmundur Davíð Gunnlaugsson stepped down when it came to light that
his family had hidden money in off-shore accounts.
Finance Minister Pravin Gordhan said during the debate on the
treasury’s budget today that tax avoidance was not illegal, but tax evasion was, and
that efforts to evade tax would be dealt with.
Efforts to limit tax evasion included international agreements on
the international exchange of information, and common reporting standards.
Country to country reporting by multinational companies would also
help keep track of required tax contributions in line with levels of activity in
South Africa.
Deputy Finance Minister Mcebisi Jonas said that one of South
Africa’s greatest achievements was its strong and stable revenue service.
It treated tax payers fairly, enjoyed public credibility and had
proven to be resilient during difficult economic conditions.
The South African Revenue Services wanted to raise R1.169 trillion
to fund the government’s socioeconomic commitments, and the recent Panama Papers
revelations showed the need to protect the fiscus.
It also showed the complexities, and extent, of bank secrecy, tax
evasion, money laundering and tax evasion.
“Illicit financial flows should be a concern to all of us, because
the sheer magnitude of these flows are a drain on the fiscus and the economy,
and undermine general prosperity,” he said. – News24
