SA is combatting a ‘scourge’ of illicit financial flows

South Africa has signed a number of multilateral agreements to combat illicit financial flows, including information exchange controls to make it more difficult for taxpayers to hide their assets abroad, President Jacob Zuma said in a written reply to Parliament.

Nqabayomzi Kwankwa from the United Democratic Movement (UDM) had asked Zuma what measures South Africa has undertaken to counter illicit financial flows, following a high-level panel report from former president Thabo Mbeki on the matter submitted in 2015.

Mbeki said in his report that illicit financial outflows from South Africa were far outstripping official development aid.

READ MORE: Illicit financial flows costing Africa billions

As much as $70-billion (R965-billion) is estimated to leave Africa annually in illicit financial flows each year.

Zuma said South Africa had taken several measures to combat this “scourge” at both domestic and international levels.

One measure was a new a multilateral agreement called the ‘automatic exchange of financial accounts information’, which allows authorities to exchange information on offshore accounts.

“South Africa is among the first 60 countries that has started the first automatic exchange on September 1 2017 and has already activated bilateral exchange relationships with 48 of the 60 countries,” Zuma said.

Other agreements that South Africa has signed include providing tax administrations with the necessary information to do high-risk assessments, and decide if they should conduct tax audits of specific individuals.

Tax treaties

Zuma said that, to date, South Africa has signed 79 tax treaties, one of which is a multilateral instrument of which 71 countries are signatories. Nigeria, Mauritius and Cameroon have been the latest countries to sign this treaty.

In accordance with the treaty, base erosion and profit shifting measures will be included to reduce opportunities for tax avoidance by multinational companies.

The signing of the Financial Intelligence Centre Act, meanwhile, which aims to develop better risk management relating to prominent individuals and enable institutions to freeze assets if identified by the United Nations Security Council, will also play an important role in combating illicit financial flows.

Zuma signed the legislation into law on April 29, and Finance Minister Malusi Gigaba has since gazetted the act and initiated steps to implement the various provisions associated with the law.

READ MORE: Moleketi – Unit probed illicit trade, tax evasion

Parliament has also conducted extensive hearings on illicit financial flows. Yunus Carrim, chairperson of the standing committee on finance, has convened several joint portfolio committee meetings among the police, finance, trade and industry and mineral resources oversight committees to discuss the matter.

In August Carrim said it had been “suggested to Parliament” that some 5 000 cases of illicit financial flows have been referred to the police, of which a “visible few have been pursued”. – News 24

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertisting

Stella set to retain her perks

Communication minister will keep Cabinet perks during her two months of special leave

Not a sweet deal, Mister

Mister Sweet workers say they will not risk their health, and the lives of others, to continue producing and packaging confectionaries

Covid-19 grounds Nigeria’s medical tourists

The country’s elites, including the president, travelled abroad for treatment but now they must use the country’s neglected health system

Nehawu launches urgent court bid over protective gear for health...

The health workers’ union says the government has rebuffed its attempts to meet about mitigating risks to workers

Press Releases

Rahima Moosa Hospital nursing college introduces no-touch facial recognition access system

The new system allows the hospital to enrol people’s faces immediately, using artificial intelligence, and integrates easily with existing access control infrastructure, including card readers and biometrics

Everyone’s talking about it. Even Kentucky

Earlier this year South African fried chicken fast-food chain, Chicken Licken®, launched a campaign for their wallet-friendly EasyBucks® meals, based on the idea of ‘Everyone’s talking about it.’

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world