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Govt can encourage South Africans to pay tax on hidden offshore accounts

23 February 2016   (0 Comments)
Posted by: Author: Ilze-Marie Meintjies
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Author: Ilze-Marie Meintjies (Eyewitness News)

A tax expert said there are numerous ways government can encourage South Africans to pay tax on undisclosed offshore cash.

The South African Institute of Tax Professional’s, Keith Engel, said granting amnesty to taxpayers could be a quick way for the state to rake in much-needed funds to increase its tax base.

Some experts believe Finance Minister Pravin Gordhan will tomorrow announce measures such as a tax amnesty, to encourage taxpayers with hidden offshore accounts to declare their assets.

Engel said government will have to waiver any prosecution.

"One, will government to waiver its criminal penalties? Probably yes. Two, will it waiver its civil penalties? The third is interest. You haven't paid in 20 years. Well, you actually owe a large interest charge. So, if you don't waive an interest charge, the interest bill is so large, it'll wipe out my offshore earnings so I won't come forward."

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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