South Africa Signal Offshore Crackdown

Paul Das

25 October 2005

In what could be a pre-cursor to a major crackdown, the South African tax authorities have issued a stern warning to the country’s high net worth individuals and corporations that make use of tax havens to reduce their tax liability, arguing that such activities contribute to limiting development in the world's poorer nations. A commissioner for the South African Revenue Service, Pravin Gordhan, responded to questions at a press conference following a meeting of the National Assembly finance committee, by revealing that his government is unaware of how many South Africans have assets in offshore jurisdictions, although it would very much like to. "We wish we knew. If we did know, we are not going to tell you either," he remarked. Mr Gordhan cited a Christian Aid report that said $11 trillion in assets were held offshore, depriving developing nations of $500 billion in tax revenues, triple the amount of aid to developing nations in any one year. The figures in Christian Aid's report have been questioned by economists around the world, however.