National Treasury has set up a Financial Action Task Force in an effort to curb illicit cross‐border flows and tax evasion.
Delivering the 2019 Mid-Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, Finance Minister Tito Mboweni said the task force will review government’s approach in dealing with money laundering.
“Steps are also being taken to strengthen cooperation between the Financial Intelligence Centre, the South African Reserve Bank and SARS [South African Revenue Service],” the Minister said.
To promote investment and reduce unnecessary, burdensome approvals, Mboweni said the Reserve Bank will propose a more modern, transparent and risk‐based approvals framework for cross‐border flows.
“Rules on active currency hedging, loops and mortgages for individuals living and working in South Africa will be reformed. To support regional integration, the HoldCo [holding company] regime will be extended to all banks,” he said.
The Reserve Bank, Mboweni said, has kept inflation stable during a very difficult period.
“They also declared a substantially increased profit share to the government. The Bank is a strange creature of statute – even though we do not own it, the National Revenue Fund receives 90% of the profits, after provisions ordinarily made by bankers. It is a beautiful arrangement – we do not have to invest any money in the Bank, but we get almost all the profits plus taxes,” said Mboweni.
The MTBPS document also notes that the SARS Large Business Centre, which focuses on major firms and high net worth individuals, was officially reopened in October.
“National Treasury will release a discussion document that reviews and proposes options to improve tax administration oversight by the 2020 Budget,” the document states. – SAnews.gov.za