7 November 2011
South Africa has signed an agreement with 12 other countries to combat cross-border tax evasion.
South Africa’s tax take is under pressure as the country’s economic recovery has not been as strong as anticipated. The finance ministry expects revenues to take up to four years to recover to levels before the global recession of 2008-09.
In a statement last week, the Treasury said it had signed the Convention on Mutual Administrative Assistance at last week’s G20 meeting in France. The treaty would allow the country to share tax information with other countries.
Other signatories include Russia, Australia, Turkey, Brazil, China and Germany.
“The benefit is that our country … will automatically have the benefit of exchange of information, simultaneous tax examinations (audits) between revenue administrations of different countries,” it said.
The South African Revenue Service has tightened tax collection, steadily raising the tax ratio to just below 30% of GDP just before the 2008-09 recession, from 25% in the 2003/04 financial year.