SARS boss: Paying taxes is a patriotic act
08 September 2015
Posted by: Author: Fin24
African patriots, both on the continent and part of the diaspora must do what they can to assert the rising of the continent, according to SA Revenue Service (SARS) commissioner Tom Moyane.
"This we would achieve by marshalling the best African brains to help define what it is that we must do to reclaim the destiny of our countries and our continent and to find creative ways to mobilise our own resources for our own development. In a small way, I hope todays deliberations will take giant steps forward in our journey of finding an African solution to Africa’s socio-economic challenges, he said at the launch of African Tax Research Network (ATRN).
He cautioned that exports out of African countries are often under-invoiced so that income accrues abroad, and imports into African countries are often over-invoiced, again, so that the excess payment accumulates in foreign accounts. The same mechanism is used whether the trading relationship is between subsidiaries of the same corporation or between unrelated, but cooperating buyers and sellers.
"These illicit outflows is then stashed into tax havens with low or no taxation," he explained. "The challenges of illicit financial outflows from the continent are as a result of carefully calibrated deceptive schemes, whose sole purpose is to deprive fiscus what is it’s legitimately due to it."
He said Governments around the world and tax administrations are operating in challenging economic times, making the task of mobilising revenues, boosting economic growth and attracting capital investments even more difficult.
"At an apogee of this pyramid are tax administration authorities who are tasked to mobilise the required resources year-on-year for the respective national governments in the continent, and South Africa is no exception. Taxation is one of the most important ways in which African countries can mobilise their own resources for sustainable development," he said.
"The recently held Conference on Financing for Development in July in Addis Ababa has firmly re-affirmed the view that we must look inwardly for solutions to extricate African countries from underdevelopment. Taxation supports the basic functions of an effective state by enabling it to raise the resources needed to deliver essential services and creates the context for economic growth."
To him payment of taxes is statutory, but at the centre of it, the payment of taxes is a patriotic act. At the same time, it is a catalyst for a social contract between the governed and government, thereby reinforcing financial citizenship.
In turn, government through its actions becomes more responsive and accountable to her citizens. Furthermore, for the above to be attained there has to be clear tax policies and fully functioning tax administrations with their synergies talking to the developmental needs of a country.
This article first appeared on fin24.com.