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Continued collaboration towards tax transparency through exchange of information

Continued collaboration towards tax transparency through exchange of information

Tshwane, 22 November 2021 – Tax Transparency and Exchange of Information occupied center stage on the international tax agenda this past week with the back-to-back hosting of the Africa Initiative and OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) Plenary meetings.

The Global Forum in 2014 launched the Africa Initiative, to ensure that African countries are equipped to leverage the improvements in global transparency and exchange of information to better tackle tax evasion. This is more important than ever as evidenced by the recent Pandora Papers leak and continued growth in the automatic exchange of tax information.

Under the leadership of the Commissioner-General of the Kenyan Revenue Authority, Mr Githii Mburu and Commissioner Kieswetter, the respective Chair and Vice Chair of the Africa Initiative, the meeting welcomed Rwanda who became the 32nd signatory of the Yaoundé Declaration. This is a stern declaration towards fighting Illicit Financial Flows (IFFs) through the exchange of tax information. The leadership team’s mandate was extended by another year.

The 10th meeting of the Africa Initiative saw representatives from more than 26 African countries deliberate on progress against the two strategic pillars of the Africa Initiative, namely: (i) raising political awareness and commitment in Africa and (ii) developing capacities in African countries in transparency and exchange of information.

As a direct result of its Train-the-Trainer programme launched in 2021, over 2 000 officials from African countries were trained in the exchange of information during 2021. South Africa had 2 officials successfully complete the Train-the-Training programme and an additional 60 SARS officials were trained on the exchange of information protocols by these officials to date, with more training interventions planned in the coming months. With some 38% of the Global Forum’s capacity building work dedicated to Africa in 2021, Commissioner Kieswetter underscored the importance of continuing the drive to expanding Exchange of Information (EOI) capacity on the continent to counter tax evasion and avoidance. The progress of the Working Group on Cross-Border Assistance in Recovery of Tax Claims as an important consequence of effective exchange of tax information was welcomed.

The 14th Plenary meeting of the Global Forum saw over 700 participants from 130 jurisdictions and 12 international organisations in attendance.

The Global Forum used the occasion of the Plenary to celebrate the 10th anniversary of its Capacity Building and Outreach programme and its success in enabling developing countries to secure much needed revenue.

The Plenary covered high-level panel discussions on transparency and exchange of information at the service of economic recovery, lessons learned on multilateral cooperation and the challenges faced on the automatic exchange of information journey.

Commissioner Kieswetter, who also serves as a Vice Chair of the Global Forum, welcomed progress on the Automatic Exchange of Information (AEOI) and the adoption of the Common Reporting Standard (CRS) second version.

“South Africa transmitted CRS data to 76 partner jurisdictions, whereas 96 partner jurisdictions concluded their exchange obligations with South Africa. Without going into specifics on the number and value reported between SARS and its partners, the Global Forum’s Annual Report states that in 2020, information on more than 75 million financial accounts worldwide, covering total assets of around EUR 9 trillion, was automatically exchanged”.

“As business models increasingly evolve to be more digital, non-local and virtual, and physical borders less relevant in the production and movement of goods and services, national tax bases are under constant threat of erosion. Working with Tax Administrations to improve the tax ecosystem to foster greater collaboration and co-operation is essential to leverage the benefits of tax transparency and exchange of information. We are progressing on our journey with rebuilding a SMART, Modern SARS with unquestionable Integrity, which is Trusted and Admired. Key to this is augmenting our human capabilities by leveraging enabling technologies and data through artificial intelligence with use of sophisticated machine learning algorithms. As we are increasing and expanding the use of data, EOI and AEOI form a valuable data source that supplements our vast third-party data repository enabling the detection of taxpayers & traders who do not comply. Non-compliance would be hard and costly, therefore I urge taxpayers and traders to do the right thing and voluntarily comply,” said Commissioner Kieswetter.

For more information on the subject of tax transparency and exchange of information, please refer to the following:

 

For more information contact [email protected]

 

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