Tshwane, 18 November 2022- This past week witnessed the tax world focusing on taking tax transparency and exchange of information to the next level during the annual OECD Global Forum on Tax Transparency and Exchange of Information for Tax Purposes (Global Forum) 15th Plenary held in Seville, Spain from 9-11 November 2022.
As business models increasingly evolve to be more digital, non-local and virtual, physical borders have become less relevant in the production and movement of goods and services. Consequently, national tax bases are under constant threat of erosion. In this regard, it is essential to work with and through stakeholders to improve the tax ecosystem to foster greater collaboration and co-operation. Leveraging the benefits of tax transparency and exchange of information supports the pursuit of developing a Tax and Customs system based on voluntary compliance.
The Global Forum currently boasts 165 member jurisdictions and this Plenary meeting, the first in-person meeting since the COVID-19 pandemic, reunited over 400 participants representing member jurisdictions and international organizations. Delegates to the Plenary re-emphasized the importance of tax transparency and Exchange of Information (EOI) in tackling tax evasion and assisting governments around the world in mobilizing domestic resources, especially as the world emerges from the global pandemic and the current economic crisis.
The Global Forum and its subsidiary bodies are strategic forums for South Africa, and they have been instrumental in lifting the veil of tax secrecy through the robust monitoring of the international standards on Exchange of Information on Request (EOIR) and Automatic Exchange of Information (AEOI), as well as its targeted capacity building initiatives, which includes cross-border assistance in tax recovery.
The Global Forum Plenary was preceded by a meeting of the Africa Initiative which actively engages countries on the continent to raise awareness to the importance of EOI and provide targeted capacity building support to assist African member jurisdictions in building efficient EOI Units. During 2022, more than 2000 officials from the continent benefitted from specialized trainings on EOI. The AI meeting also welcomed the development of a toolkit on cross-border assistance in recovery of tax claims.
Commissioner Edward Kieswetter represented South Africa as head of SARS, as well as in his capacity as Vice Chair of the Global Forum’s Steering Group and Vice Chair of the Africa Initiative.
Highlights of the Plenary included the adoption of South Africa’s 2022 Exchange of Information on Request Second Round Phase 2 Peer Review report, as well as Commissioner Kieswetter signing of the Multilateral Competent Authority Agreement on the Automatic Exchange regarding CRS Avoidance Arrangements and Opaque Offshore Structures (MDR MCAA) alongside from 14 other jurisdictions, whilst 22 jurisdictions signed the MCAA on Automatic Exchange of Information on Income Derived through Digital Platforms (DPI MCAA).
In its latest AEOI exchanges, South Africa shared information automatically with 78 partners and SARS continues to make significant inroads in using the AEOI data received to detect possible anomalies in taxpayer assessments. The Global Forum’s reported for 2021, information on more than 111 million financial accounts worldwide, covering total assets of around EUR 11 trillion, was automatically exchanged”.
“We are progressing on our journey of building 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 in line with our Strategic Objective 5, EOI and AEOI form a valuable data source that supplements our vast third-party data repository enabling the detection of taxpayers and traders who do not comply. Non-compliance will be made hard and costly, therefore I urge taxpayers and traders to do the right thing and voluntarily comply,” said Commissioner Kieswetter.
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