Donwald Pressly

The Sa Revenue Service (Sars) was engaging with companies that had their base of operations in South Africa “but appear to have shifted a large proportion of their profits to lower-tax jurisdictions where only a few people are employed”, Pravin Gordhan said yesterday.

Gordhan said that Sars was also pursuing schemes identified under the revised general anti-avoidance rules following several years of “painstaking work”, tracing transactions through multiple jurisdictions and entities.

He said: “These benefits typically accrue to advisors and pre-existing shareholders, rather than new shareholders who were introduced as the ostensible beneficiaries of the transactions.”

The government is also cracking down on companies that get government contracts, but are not contributing their share to the tax cake.

“Sars is also targeting other areas of non-compliance, including recipients of government expenditure who are not up to date with their taxes.”

By working closely with the Treasury and interfacing with the government payment system, Sars had identified firms which had received payments “but have not declared their full income”, he said.

Gordhan reported that they were being audited “and others will follow”.

The minister added that this intervention would be “further underpinned” by the reform of the tax clearance certificate process announced in October.