CAPE TOWN: South African tax collectors will be sharing taxpayers’ revenue and tax information with their counterparts in more than 50 countries by September.
The South African Revenue Service (SARS) announced its commitment to the automatic and reciprocal exchange of tax information with authorities in more than 50 other “jurisdictions”.
This will be under the Organization for Economic Cooperation and Development, with 50 more countries expected to join the Common Reporting Standard (CRS) initiative by September next year.
According to SARS, the development is part of an international initiative – under the auspices of the Global Forum on Transparency and Exchange of Information for Tax Purposes of which 139 countries are members – to assist revenue authorities around the world to ensure everybody pays the right amount of tax.
South Africa’s adoption of the CRS obliges a number of financial institutions, among other obligations, to report specific information of clients who are not tax-resident in South Africa to SARS by May 31.
Financial information to be gathered under the CRS includes interest, dividends, account balances, income from certain insurance products, sales proceeds from financial assets and other income generated.
SARS commissioner Tom Moyane welcomed the development, hailing it as a major breakthrough in stemming illicit financial outflows.
“The implementation of the standard is regarded as a significant and ambitious step in the field of administrative cooperation between revenue authorities to enhance compliance and fairness in tax,” he said.
“It was necessitated, among others, by free financial flows in the globalised arena which enables businesses and individuals to invest their wealth in financial institutions in jurisdictions outside their country of residence.”
SARS has established a special voluntarily disclosure programme to give non-compliant taxpayers an opportunity to regularise their unauthorised foreign assets and income by voluntary disclosing the information.
Individuals and companies have until August 31 to apply.
