SARS Moves To Ease Tax Secrecy Rules

by Robert Lee, Tax-News.com, London

16 October 2001

Speaking to the Parliamentary Finance Committee on the Second Revenue Laws Amendment, the South African Revenue Service general manager of tax law administration revealed that the SARS is considering relaxing secrecy provisions of income tax, customs, and VAT laws.

Kosie Louw explained that this would, in keeping with the international climate, ease flow of information from the tax authorities to other bodies, such as the police, and would ease prosecutions in cases of terrorist or other money laundering, and tax evasion. The procedures for authorisation of disclosure have not yet been decided upon, but possibilities under consideration include the commissioner for inland revenue applying to the high court for permission, or the establishment of a panel of independent experts to consider requests.

However, a proviso attached to the proposed bill dictates that in order for relaxed secrecy provisions to be utilised, the offense under investigation would have to carry a penalty of at least five years, and pose a serious risk to public safety.

The bill also contains provisions to allow the SARS to create rules on dispute processes, so as to avoid lengthy litigation, and empowers the tax commissioner to write off tax debts when it would be uneconomical for the state to pursue the matter further.

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