Good news: On Tuesday, Finance Minister Pravin Gordhan told Parliament's standing committee on finance that many multi-national companies are asking Africa to build fiscal capacity.
Bad news: It's those same global leaders that participate in tax avoidance strategies that harm the country as a whole, says Fin24
For example, Cadbury's Indian division is accused of furnishing false documents and pretending to make chocolates in a non-existent factory to avoid paying excise duty, says FSPBusiness
That doesn't mean every business transaction will put you under SARS's radar though, as you DO have the right to arrange your affairs so you incur the least tax liability, confirms The Practical Tax Loose Leaf
Just remember that there's a fine line between what is legal and what isn't.
Be careful of entering into 'business transactions' where a tax break is the only benefit!
Because SARS has the power to impose anti-avoidance measures.
This means SARS'll look out for any transaction you enter into for the main purpose of gaining a tax benefit, and wouldn't be considered a transaction expected in the normal course of business. SARS'll look for transactions that don't appear to give any benefit other than for tax purposes.
And if SARS does suspect your company of using illegal measures as a form of tax avoidance, SARS can apply penalties as high as 200%.
Here's the only way to stay on the right side of SARS if you're considering an unusual business transaction…
So if you're unsure how SARS will treat a new business transaction, run it past SARS first – rather be told upfront that you're about to embark in something SARS sees as illegal then take the risk and face penalties and fines for tax evasion, whether the tax evasion was intentional or not!
If SARS does suspects tax evasion, remember that under the Tax Administration Act (TAA)
, 'SARS has extensive power to conduct a search of premises and seize documents, books of account and records,' explains the Practical Tax Loose Leaf
This means anything slightly dodgy WILL be found out – rather be safe than sorry.