Cape Town – SA Revenue Service (Sars) commissioner Tom Moyane is concerned about illicit money flows to and from Africa.
It is estimated that globally illicit money transfer schemes cause a total loss of about $240bn annually, Moyane said at the opening of the International Association of Financial Executives Institutes (IAFEI) World Congress, taking place in Cape Town this week. It is the first time the congress takes place in Africa.
"Illicit money that leaves Africa reduces money available to Africa to create jobs and develop economies. The same goes for illicit flows between African countries, which could include illegal trading in diamonds or under-pricing of mineral resources for instance," said Moyane.
"Africa needs legislation in place for this and to build capacity for tax and customs authorities, policing and prosecuting."
The cash economy is another area he said must be looked into as such income is often undetected and unrecorded for tax purposes, depriving the fiscus of its due.
"The challenge of cash transactions not recorded means we need to be innovative and employ the best in the market," said Moyane.
"It is not all doom and gloom. We must work together, share insights and find collective solutions."
Moyane said South Africans are aware that one cannot leave it to business and civil society to overcome current challenges – government must also play a role.
"Rapid development brings new challenges for accounting officers and chief financial officers (CFOs). The global economy faces major challenges and we must all work together to ensure a better world for all. CFOs can take bold steps to make a difference," said Moyane.
He emphasised that SA is open for business and that about 42% of the gross domestic product (GDP) in 2015 was foreign direct investment (FDI).
"The SA government has plans in place to enhance the economy. The National Development Plan (NDP) aims to transform the economy and government also has a 9-point plan for economic development," said Moyane.
"We live in challenging times, but despite tough economic conditions we have a resilient tax system. Government committed to be responsible regarding the economy. We won't spend more than we have nor borrow more than we can repay. Until then we have to be tough on ourselves."
He called on enterprises to comply with both the spirit and letter of tax laws.
"Business reputations are on the line with citizens. Tax must be part of the boardroom agenda," said Moyane.
"SA is an investor friendly jurisdiction. It has a well-developed judicial system and we are a vibrant society. We have certainty in tax laws and equity. The corporate tax rate has been at 28% for a number of years now."
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