Tuesday, 23 November 2021

Pretoria: The South African Revenue Service (SARS) was progressing well in its journey of rebuilding “a smart, modern SARS” with “unquestionable integrity” that was “trusted and admired,” says Commissioner Edward Kieswetter.

The Commissioner made the comments during the recent Africa Initiative and OECD Global Forum plenary on Transparency and Exchange of Information for Tax Purposes.

He said: “Key to this is augmenting our human capabilities by leveraging enabling technologies and data through artificial intelligence with use of sophisticated machine learning algorithms.

“As we are increasing and expanding the use of data, EOI and AEOI form a valuable data source that supplements our vast third-party data repository enabling the detection of taxpayers and traders who do not comply. Non-compliance would be hard and costly, therefore I urge taxpayers and traders to do the right thing and voluntarily comply.”

In a statement, SARS said the plenary underscored the importance of continuing the drive to expanding Exchange of Information (EOI) capacity on the continent to counter tax evasion and avoidance.

Tax transparency and exchange of information occupied centre stage at the plenary meetings.

The Global Forum in 2014 launched the Africa Initiative in an effort to ensure that African countries were equipped to leverage the improvements in global transparency and exchange of information to better tackle tax evasion.

“This is more important than ever as evidenced by the recent Pandora Papers leak and continued growth in the automatic exchange of tax information,” the South African Revenue Service (SARS) said in a statement.

At the meeting, Rwanda was welcomed as the 32nd signatory of the Yaoundé Declaration, which was the continent’s declaration towards fighting Illicit Financial Flows (IFFs) through the exchange of tax information. The leadership team’s mandate, led by Commissioner-General of the Kenyan Revenue Authority Githii Mburu and Commissioner Kieswetter, as Chair and Vice Chair of the Africa Initiative, was extended by another year.

The 10th meeting of the Africa Initiative saw representatives from more than 26 African countries deliberate on progress against the two strategic pillars of the Africa Initiative. This included the raising of political awareness and commitment in Africa and developing capacities in African countries in transparency and exchange of information.

The Plenary covered high-level panel discussions on transparency and exchange of information at the service of economic recovery, lessons learned on multilateral cooperation and the challenges faced on the automatic exchange of information journey.

Kieswetter, who also serves as a Vice Chair of the Global Forum, welcomed progress on the Automatic Exchange of Information (AEOI) and the adoption of the Common Reporting Standard (CRS) second version.

He said South Africa transmitted CRS data to 76 partner jurisdictions, whereas 96 partner jurisdictions concluded their exchange obligations with South Africa.

“Without going into specifics on the number and value reported between SARS and its partners, the Global Forum’s Annual Report states that in 2020, information on more than 75 million financial accounts worldwide, covering total assets of around EUR 9 trillion, was automatically exchanged.

“As business models increasingly evolve to be more digital, non-local and virtual, and physical borders less relevant in the production and movement of goods and services, national tax bases are under constant threat of erosion. Working with Tax Administrations to improve the tax ecosystem to foster greater collaboration and co-operation is essential to leverage the benefits of tax transparency and exchange of information.”