Voluntary disclosure drive nets 2,002 applicants
The gross value of foreign assets declared is R35bn, Finance Minister Malusi Gigaba says
A total of 2,002 applications under the special voluntary disclosure programme, which closed on August 31, were received with the gross value of foreign assets declared being R35bn, Finance Minister Malusi Gigaba said on Tuesday.
He said tax revenue from the programme could potentially amount to R4bn, though this was subject to further verification.
Judge Dennis Davis, who heads up the Davis Tax Committee and was an ardent proponent of the special voluntary disclosure programme, said he was "certainly encouraged" by the outcome, though he believed there were still many people who had not come forward.
It is understood that the government was hoping for asset declarations of R40bn from the latest programme, which provided tax and foreign exchange relief for taxpayers who declared their illegal assets. In the 2003 tax amnesty, 42,000 applications were received with R69bn in assets being declared of which R48bn was for illegally held offshore assets.
The final result of the programme demonstrates that, as is often the case with South African taxpayers, there was a final spurt of applications just before the deadline. By August 21, only 585 applications had been received according to information provided by the South African Revenue Service (SARS).
In a written reply to a parliamentary question by DA deputy finance spokesperson Alf Lees, Gigaba said the values of the individual declarations ranged from zero to R1.4bn.
The R35bn in gross value of foreign assets declared was based on the 40% inclusion rate provided for in the programme. "We note that some taxpayers have disclosed 100% of the value of foreign assets on the application forms as opposed to only 40%. SARS is verifying the information submitted and will only be in a position to finalise this value once all applications have been verified," the minister said.
Of the 2,002 applications received, 305 had been processed, resulting in 280 special voluntary disclosure programme agreements being concluded with tax liabilities totaling R1bn, of which R822m has been collected to date.
"Based on taxpayers’ own declarations, an additional amount of about R4bn is potentially collectable, however, we are in the process of verifying the correctness of the declarations," Gigaba said. The 2003 tax amnesty raised R2.9bn in levies, but the levies under the special voluntary disclosure programme are higher.
Lees said the DA was pleased the programme had received a positive reaction from so many non-compliant taxpayers. "While the 2,002 applications received is very much lower than the very high numbers suggested to be possible when the programme was put in place, the expected R4bn in tax revenue cannot be sneezed at and will be a welcome relief given the expected 2017-18 revenue collection shortfall, that could be as high as R50bn."
Davis believed there were many people with undeclared assets who had not come forward, noting they justified this non-compliance on the basis of the narrative of corruption and were encouraged to do so by the lack of an effective deterrence. He urged SARS to launch prosecutions against these individuals for tax fraud.