President Jacob Zuma warned on Thursday that those behind illegal capital outflows would be caught.
Replying to questions in the National Assembly, he said the United Nations Economic Commission for Africa (UNECA) recently estimated that US50 billion (about R383.28bn) was illegally exported out of the African continent every year.
This was done through tax evasion, incorrect invoicing, import over-pricing, and under-pricing exports.
According to information given to the African Union, the countries most affected were South Africa, Algeria, Egypt, Morocco, and Nigeria.
The flow of illicit finance severely undermined the possibilities for socio-economic development across the continent, Zuma said.
It reduced tax collection, cancelled investment, and undermined free trade as it removed resources that could otherwise be used for poverty alleviation and economic growth.
However, the government had measures in place to address this problem.
The SA Reserve Bank’s financial surveillance department, which is responsible for administering exchange control, continued to detect and deal with unlawful financial outflows by people who bypassed restrictions placed on the movement of funds exceeding certain thresholds.
In addition, the Financial Intelligence Centre processed information from a range of financial institutions, such as banks, to prevent money laundering and terror financing.
In the previous financial year, the centre referred cases to the value of R66.1 billion to law enforcement agencies and the SA Revenue Service (SARS) for investigation.
SARS had also achieved significant success in identifying, seizing where appropriate, and prosecuting those involved in illegal imports, the under- and over-invoicing of imports and exports, and Value Added Tax fraud.
During the current financial year, SARS had already confiscated 3.4 million articles of clothing and footwear valued at almost R580 million.
It had seized drugs worth R139m and 683 million “sticks of cigarettes” valued at R180m.
In addition, SARS had offered amnesty to encourage culprits to come forward.
“Government will work with the United Nations Economic Commission for Africa to contribute to stemming the tide of the illicit financial outflows from South Africa,” Zuma said.
Zuma warns against illicit capital outflow
President Jacob Zuma warned on Thursday that those behind illegal capital outflows would be caught.
Replying to questions in the National Assembly, he said the United Nations Economic Commission for Africa (UNECA) recently estimated that US50 billion (about R383.28bn) was illegally exported out of the African continent every year.
This was done through tax evasion, incorrect invoicing, import over-pricing, and under-pricing exports.
According to information given to the African Union, the countries most affected were South Africa, Algeria, Egypt, Morocco, and Nigeria.
The flow of illicit finance severely undermined the possibilities for socio-economic development across the continent, Zuma said.
It reduced tax collection, cancelled investment, and undermined free trade as it removed resources that could otherwise be used for poverty alleviation and economic growth.
However, the government had measures in place to address this problem.
The SA Reserve Bank’s financial surveillance department, which is responsible for administering exchange control, continued to detect and deal with unlawful financial outflows by people who bypassed restrictions placed on the movement of funds exceeding certain thresholds.
In addition, the Financial Intelligence Centre processed information from a range of financial institutions, such as banks, to prevent money laundering and terror financing.
In the previous financial year, the centre referred cases to the value of R66.1 billion to law enforcement agencies and the SA Revenue Service (SARS) for investigation.
SARS had also achieved significant success in identifying, seizing where appropriate, and prosecuting those involved in illegal imports, the under- and over-invoicing of imports and exports, and Value Added Tax fraud.
During the current financial year, SARS had already confiscated 3.4 million articles of clothing and footwear valued at almost R580 million.
It had seized drugs worth R139m and 683 million “sticks of cigarettes” valued at R180m.
In addition, SARS had offered amnesty to encourage culprits to come forward.
“Government will work with the United Nations Economic Commission for Africa to contribute to stemming the tide of the illicit financial outflows from South Africa,” Zuma said.
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