Gordhan warns against tax avoidance

2013-02-27 17:04
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Parliament - Finance Minister Pravin Gordhan warned on Wednesday against tax avoidance and non-compliance.

Presenting his 2013/14 Budget in the National Assembly, he said millions of honest taxpayers in the country continued to sustain the growth and development agenda.

"To them we owe a debt of gratitude and, more importantly, a commitment to spend that money wisely, efficiently, and effectively. We thank you.

"We also owe it to our taxpayers to ensure they are not carrying the burden of those who benefit from our country’s infrastructure and resources without paying their fair share of the costs," he said.

Around the world, taxpayers and their governments were challenging large multinational companies that paid little or no tax in the countries in which they operated.

The SA Revenue Service (Sars) was currently engaging with companies which had their base of operations in South Africa, but appeared to have shifted a large proportion of their profits to low tax jurisdictions, where only a few people were employed.

"This is unacceptable. Sars is also pursuing schemes identified under the revised general anti-avoidance rules, following several years’ painstaking work tracing transactions through multiple jurisdictions and entities," Gordhan said.

These benefits typically accrued to advisors and pre-existing shareholders, rather than new shareholders who were introduced as the ostensible beneficiaries of the transactions.

On the temporary voluntary disclosure programme implemented under legislation enacted in 2010, which allowed taxpayers in default to regularise their tax affairs, Gordhan said more than 18,000 taxpayers had made use of the programme and tax of more than R3bn had been collected so far as a result of the programme.

From October 1, 2012, a permanent voluntary disclosure programme became effective as part of the Tax Administration Act.

Already, 700 taxpayers had come forward. Tax of more than R200m would be collected before the end of March 2013.

Sars was also targeting other areas of non-compliance, including recipients of government spending who were not up to date with their taxes.

By working closely with the National Treasury and interfacing with the government payment system, Sars had identified companies which had received payments, but had not declared their full income.

"They are being audited, and others will follow. This intervention will be further underpinned by the reform of the Tax Clearance Certificate process which I announced in October."

In the near future, Sars would introduce a single registration process in which companies were able to register once-off in a simple manner for all tax types and customs activities, he said.

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