Panama Papers: SA Treasury to investigate South Africans who may be linked
National Treasury on Wednesday said the country’s financial services agencies would investigate South Africans who may be linked to offshore bank accounts by having moved funds illegally out of the country, this following the global leak of offshore accounts details in what has been dubbed the ‘Panama Papers’.
Eleven and a half million files from the database of Panamanian law firm, Mossack Fonseca, were leaked to media organisations and revealed an extensive network of how leaders, businesses and celebrities across the globe were, with the help of the firm, hiding money in tax shelters around the world.
Among the South Africans who were named in the leaks were President Jacob Zuma’s nephew, Khulubuse Zuma, who was linked to a company called Caprikat which scored a R100 billion oil deal in the Democratic Republic of Congo. Businessman Fana Hlongwane, who was linked to the controversial Arms Deal, was also named in the leaks.
Khulubuse Zuma has since dismissed the allegations, saying there was nothing new with his links to Caprikat and denied that he held an offshore bank account.
In a statement, Treasury said that holding funds in an offshore bank was by itself not illegal, as long as the necessary approvals and disclosures were made to the relevant authorities.
Treasury said though that relevant agencies like the South African Revenue Service (Sars), Financial Intelligence Centre (FIC), and the Reserve Bank would investigate South Africans who may be linked to offshore bank accounts.
Treasury said a special voluntary disclosure programme (VDP) was proposed in the 2016 Budget to make it easier for non-compliant individuals and firms to disclose assets held and income earned offshore.
“The Minister would like encourage those that may be affected to use the VDP opportunity and ensure their tax and exchange control affairs are in order. Depending on the nature of the contravention of the laws, action against those who have flouted the rules includes the imposition of taxes, understatement and other penalties, forfeiture of funds and criminal prosecution,” Treasury said.
Treasury said South Africa was at the forefront of international work on exchange of information (EOI) and had acceded to a number of bilateral agreements, as well as a multilateral agreement, to make EOI possible. - ANA