SA Revenue Service to work with US counterpart in financial crime crackdown

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SARS and the IRS Criminal Investigation division are partnering to fight financial crimes like money laundering.(iStock)
SARS and the IRS Criminal Investigation division are partnering to fight financial crimes like money laundering.(iStock)
  • SARS is partnering with a division of the US Internal Revenue Service to crack down on tax crimes. 
  • In a statement, both entities said that they have already uncovered emerging schemes. 
  • SARS Commissioner Edward Kieswetter says SARS wants to make it easy for compliant taxpayers to meet their obligations, and difficult for criminals. 

The South African Revenue Service (SARS) has partnered with the US's Internal Revenue Service Criminal Investigation (IRS-CI) division to detect and fight tax and economic crimes affecting both countries.

In a joint statement issued on Tuesday, SARS and the IRS-CI said they would work together to identify and investigate crimes such as international public corruption, cyber fraud, and money laundering.

"The newly formed partnership has already uncovered emerging schemes perpetrated by promoters, professional enablers, and financial institutions," the statement read.

Easy for taxpayers, hard for dodgers

SARS Commissioner Edward Kieswetter welcomed the partnership with the IRS, given the revenue service's renewed focus on non-compliant high wealth individuals and offshore holdings.

"One of our strategic objectives is to make it easy for taxpayers to comply with their tax obligations and hard and costly for those who willfully do not comply," Kieswetter said. "We trust that this partnership will yield results, also in terms of augmenting our internal skill sets as we clamp down on illegal activities affecting both our countries."

Last week at the launch of the 2021/22 tax filing season, Kieswetter said the revenue service is addressing non-compliance by using data exchange and analysis.

International vigilance

SARS, through the OECD's Automated Exchange of Information programme, exchanges information with 104 countries. "These data exchanges are proving especially useful as we step up our compliance programme for high wealth individuals," said Kieswetter.

In an interview with Fin24, Kieswetter said that through data exchanges from over 100 offshore jurisdictions, SARS could detect large numbers of South Africans with offshore financial assets. SARS has issued letters to 275 wealthy individuals with financial assets abroad, and 108 have responded so far.

IRS-CI director of global operations, Guy Ficco said the battle against financial crimes cannot be fought alone by any one country.

"Taxpayers and tax professionals using offshore and other sophisticated schemes to evade US and South African laws will be uncovered and prosecuted to the full extent of the law," he said.

The IRS-CI also leads a training initiative sharing financial investigative techniques with SARS and South African law enforcement officers and government officials.

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