EFF Submission to the Davis Tax Committee that could lead to the resolution of the eTolls Crisis
16 July 2015
The Economic Freedom Fighters as part of a substantial written submission to be made in due course, made an oral presentation to the Davis Tax Committee on illicit financial flows and aggressive tax avoidance. There is overwhelming evidence to show that South Africa is losing potential revenue in billions every year. The current legislation and tax authority’s capacity is not adequate to tackle illicit financial flow in all its manifestation.
According to the Global Financial Integrity (GFI), South Africa lost more than R237 billion in 2011. GFI further reported that, between 2003 and 2012 South Africa lost more than R2 trillion. According to the AU High Level Panel on Illicit Financial Flows, led by former President Thabo Mbeki, Africa loses more than R650 billion annually.
As a matter of fact, it was SARS who told the Panel that one multinational company was found to have avoided an estimate of R25 billion in taxes by claiming that a large part of its business was conducted in the United Kingdom and Switzerland.
When the South African authorities investigated the case, they found that the UK and Swiss subsidiaries/branches had only a handful of low-paid personnel with relatively junior responsibilities and that these offices did not handle any of the commodities in which the company dealt (nor were they legally able to take title to those commodities).