Gigaba Urges Tax Practitioners To Help Combat Illicit Financial Flows

Staff Writer | The Republic Mail

By Mbali Sibiya

Finance Minister Malusi Gigaba has on Monday, urged South African tax practitioners to assist government in combating corruption, money laundering and illicit financial flows which deprive taxpayers their deserved benefits.

Gigaba said that the tax revenues collected kept South Africa running, paying for social upliftment and poverty alleviation through grants and the multitude of services that the government provides, much of which benefits the most vulnerable in society.

Gigaba was speaking at the South African Institute of Tax Practitioners’ Tax Indaba in Johannesburg on Monday.

“We encourage you as tax professionals to help us send the message that individuals and businesses should obey the law, disclose their offshore assets, and pay their fair share, before they are caught out,” Gigaba said.

“Unfortunately, as long as taxpayers either remain non-compliant or move to reduce their tax burdens, there will need to be corresponding tax policy amendments to uphold the integrity of the tax system.”

Gigaba said that the positive actions of business, labour, communities and individuals will be vital to setting the country on an improved growth path for the benefit of all citizens.

He spoke strongly against corporates involved in illicit financial flows, saying that government would ensure that they pay their fair share of the taxes.

“Action must also be taken to ensure corporates pay their fair share, which we are attempting to address through measures such as those which are currently proposed to stop the use of share buybacks and dividend stripping to avoid capital gains tax,” Gigaba said.

“An area where we will increasingly devote attention to, is arresting illicit financial flows. Several studies including Former President Thabo Mbeki’s High-Level Panel on Illicit Financial Flows, reports by Global Financial Integrity and the Panama Papers demonstrate how African countries lose billions of dollars per year to trade mispricing, illegal offshoring by the wealthy for tax evasion, as well as by criminals and corrupt persons.”

Gigaba said that development imperative for government was the need for domestic resource mobilisation, meaning the need for African countries to finance their own development.

He said that government endeavours to remain highly consultative with the public on tax policy changes and welcome the oversight that Parliament provides.