SARS identifies names of South Africans mentioned in Panama Papers

THE South African Revenue Service (SARS) has identified the names of 1,700 individual South African residents in the data released in the Panama Papers.

They range from shareholders and directors to beneficiaries.

In addition, 56 South African intermediaries had been identified, SARS group executive for product oversight, legal and policy, Vlok Springton, said in a presentation to a joint meeting of three parliamentary committees on Wednesday to discuss the Panama Papers.

SARS is now matching the identities of these individuals with the SARS database and testing the Panama data against the income tax declarations of the South African residents.

So far 79 of a total 560 offshore entities have been matched to 81 South African residents.

Springton said it was too early to predict the level of tax avoidance or evasion and cautioned that the processes of profiling and enforcement were lengthy by nature.

"The data available to SARS with respect to the Panama Papers is a useful starting point for further enquiry but will require substantial follow-up work," Springton said.

The international consortium of investigative journalists which released the Panama Papers has refused requests to release its database of information — including 11.5-million internal files — gleaned from Panamanian law firm Mossack Fonseca.

SARS participated in a special meeting of the Joint International Tax Shelter Information and Collaboration Network on the Panama Papers in April. An international action plan was agreed on aimed at obtaining more information and sharing it efficiently among tax administrators.

"International co-operation will intensify once a better understanding of the Panama data becomes available," Springton said.

He noted that transfer pricing audits in the 2015-16 fiscal year had yielded R721m from the mining and quarrying industry, R95m in the oil refinery sector and R43m from manufacturing.

Reserve Bank head of financial surveillance Elijah Mazibuko told MPs from the finance, trade and industry and mineral resources committees that from January 2015 to date, about 145 bank accounts with about R307m were frozen for suspicious illicit financial flows.

A total of 77 new investigations were opened during this period and a number of arrests were made. He noted that there had been a "dramatic" increase in the number of referrals of suspect transactions.

Mazibuko said was legal for South African residents to invest up to R10m plus R1m a year offshore, and corporates up to R1bn without prior reference to the financial surveillance department of the Reserve Bank.

by Linda Ensor/BDlive