Question NW2529 to the Minister of Finance
04 October 2023 - NW2529
Hendricks, Mr MGE to ask the Minister of Finance
(1)Whether, in light of the statement made by the Commissioner of the SA Revenue Service (SARS) acknowledging that illicit financial flows (IFF) must be addressed, he will revive the department that dealt with cases of IFF, but was closed by his predecessors; if not, why not; if so, what are the relevant details; (2) whether he intends directing the monies recovered from IFF to ensuring that all South Africans have a right to water and not only access; if not, what is the position in this regard; if so, what are the relevant details; (3) whether he will (a) give SARS greater capacity to hold persons accountable for IFF and (b) allow more effective engagement between government institutions like the National Prosecuting Authority, Financial Intelligence Centre and SARS, with the objective to bring about greater capacities and integration to implement mechanisms for transparency amongst them; if not, why not; if so, what are the relevant details?
Reply:
1. In line with the findings and recommendations of the Nugent Commission of Inquiry, SARS has implemented an improved integrated and collaborative enforcement approach to address issues related to Illicit Financial Flows (IFFs). Various units operating collaboratively have been established to provide a credible response to the threat/risk brought about by IFFs in line with the SARS strategy, to make it hard and costly for taxpayers and traders who do not want to comply. They include:
- STCC, which deals with Syndicated Tax and Customs Crime;
- CI, which deals with criminal investigations involving tax and customs crimes;
- LBI dealing with Large Business and International;
- PIRE dealing with Priority Individuals and Related Entities;
- HWI dealing with High Wealth Individuals and;
- Specialised Audit.
2. All allocations are determined as part of the budget process. If a court decides that recovered money must go into the Criminal Assets Recovery Account (CARA), then funding is allocated in terms of Section 69A of the Prevention of Organised Crime Act of 1998 (POCA) that provides for the allocation of funds to law enforcement agencies and organisations rendering assistance in any manner to victims of crime.
Section 65 of POCA establishes a Criminal Assets Recovery Committee (CARC), which is responsible for providing Cabinet with recommendations on the utilisation of money deposited into CARA and providing advice on specific issues related to the criminal assets recovery process. It consists of the Ministers of Justice and Correctional Services (MoJCS - Chairperson), Police and Finance, the National Director of Public Prosecutions, and, if necessary, two other persons designated by the MoJCS.
3. (a) SARS, like any other entity/department which requires funding from the fiscus, participates in the budget process through which funds are allocated for different priorities and programmes of government.
(b) In 2019, SARS established the Liaison Unit with the aim to strengthen whole-of government collaboration but, particularly, with the law enforcement agencies, the FIC, the AFU, and SARB. This includes:
- Exchanging taxpayer and customs information lawfully;
- Collaboratively executing investigations and prosecutions;
- Sharing resources like people, data, and technology to enhance efficient and effective expenditure by agencies in support of national compliance generally and tax compliance in particular.