Manuel Allows South Africa's Illegal Offshore Investors To Stay Silent

by Robert Lee, Tax-News.com, London

01 April 2003

It appears that the South African government has back-tracked on its proposal to compel investors repatriating illegal funds under Finance Minister Trevor Manuel's amnesty to disclose details of how they moved their assets offshore.

According to reports, sources close to the government have said the government is afraid the amnesty will fail, as many will not be willing to divulge such sensitive information for fear of prosecution. This would jeopardize the potential flow of billions of rand back into the country.

The amnesty was announced in the budget earlier this year. The government intends to impose a 5% levy on money that is repatriated in return for immunity from prosecution, as much of the investment activity was conducted illegally during the apartheid era. There will also be a levy of 10% for those who wish to keep their funds offshore.

The draft Taxation Laws Amendment bill, which was due out last Friday, has been delayed by technicalities, but provides for a six month window between May 1 and October 31 for people to declare funds targeted by the amnesty.

The government has set up a control centre that will handle the applications, and which is also expected to investigate any links with criminal activity.

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