Committees call for more time for tax regularisation
09 March 2016
Posted by: Author: Linda Ensor
Author: Linda Ensor (BDlive)
Parliament’s two finance committees have called on the Treasury to review the window for people with illegally held offshore assets and income to regularise their financial affairs with the South African Revenue Service (SARS) and the Reserve Bank, writes Linda Ensor.
Concern was expressed during public hearings on the fiscal framework that the six months from October 1 to March 31 provided for in the budget for the relaxation of tax and foreign exchange laws was not long enough, as the compilation and submission of documents would take some time.
In a report and recommendations on the budget, the two committees said they supported the voluntary disclosure programme as outlined, but wanted the Treasury to consider a longer period. African National Congress MP and finance committee member Makhosi Khoza said an extension would encourage more people to come forward.
Finance committee chairman Yunus Carrim did not mince his words in describing those who secreted money out of SA illegally, describing them as "rogues" and "absolute criminals", who should be in jail.
In terms of the proposals, those with illegally held funds will be under pressure to disclose their finances to the authorities as new global standards for the automatic exchange of information between tax authorities come into force next year. In terms of the offer, the revenue service will include only 50% of the total amount used to fund the acquisition of undeclared offshore assets acquired before March 1 2015 in taxable income and subject to normal tax.
Only those investment returns accrued from offshore assets from March 1 2010 onwards will be included in taxable income and subject to normal tax. Investment returns before March 1 will be exempt. Interest on tax debts arising from the disclosure will commence only from March 1 2010. No understatement penalties will be imposed and neither will SARS pursue criminal prosecution for disclosed tax offences.
The Reserve Bank is also offering South African residents a chance to regularise their exchange control contraventions under the same programme. This will apply to contraventions before February 29 2016.
Another recommendation of the committees’ report was that the budget and other support for broadband needed to be increased, given its potential to improve economic growth through expanded and faster broadband services.
The committees believed that more money should be given to small business development. The report also called for legislation on state-owned enterprises to be finalised expeditiously.
Another concern of the two committees was that the sharp increase in the fuel levy "may have a disproportionate effect on poorer workers who commute using minibus taxis".
This article first appeared on bdlive.co.za.