The National Treasury has urged anyone with an offshore account at Mossack Fonseca to come forward before they’re identified next month, when all names implicated in the infamous #PanamaPapers are publicly released.
Treasury welcomed the investigative report, adding that relevant South African tax agencies such as SARS will investigate it once it comes out to ensure that those that have links have complied with local law.
The department said that with this in mind, it’s in the best interest of all #PanamaPapers offshore account holders to step forward.
“Funds in an offshore account may contravene exchange control regulations and tax laws if the source of the funds has not been disclosed to the appropriate authorities,” the department said.
“The world is systemically narrowing the scope for those who want to hide their offshore assets and avoid paying their taxes due to the South African fiscus,” Treasury added. “It is in the interests of all those hiding their assets to come clean and disclose, and the government offers such persons a way to legitimise their financial affairs before they are caught out.”
A special, less stringent voluntary disclosure programme (VDP), proposed in this year’s national budget speech, may make it easier for non-compliant individuals and firms to disclose offshore assets, should it be adopted by parliament and enacted between 1st October 2016 and 31st March 2017.
“The minister [of finance, Pravin Gordhan] would like encourage those that may be affected to use the VDP opportunity and ensure their tax and exchange control affairs are in order,” Treasury said.
Depending on how severe implicated persons will be found to have contravened local law, possible action ranges from the imposition of taxes, understatement and other penalties, forfeiture of funds and criminal prosecution.[Source – National Treasury, image CC – Government ZA]