Most Read

  • We Will Rock You tour of SA postpones to 2022
    Showtime Management and international partner Selladoor Worldwide have postponed the South African tour of the We Will Rock You musical to 2022. South Africa is currently in its third wave of Covid-19 infections and, as such, the government has implemented precautions that only allows for a total audience of 100 people.
  • #YouthMatters: Leigh-Anne Salonika, founder of OnlyKind
    From East London to some of South Africa's most storied agencies. After winning on global stages and achieving what she set out to on the inside of the corporate advertising machinery, Leigh-Anne Salonika is living her purpose, and in doing so working with brands to unlock theirs By Evan-Lee Courie
  • 6 critical PoPIA compliance steps to take before 1 July
    The eleventh hour is upon businesses who are not Protection of Personal Information Act (PoPIA) compliant. The effective date of 1 July is upon us. By Rian Schoeman
Show more

Marketing & Media jobs

More...Submit a jobOpen account


More...Submit news
Advertise on Bizcommunity

Subscribe to industry newsletters

#MauritiusLeaks shows the urgent need to combat profit shifting

According to a recent expose, Mauritius (ranked in the top 15 corporate tax havens, with a statutory corporate tax rate of 3%) is another favourite destination of transnational companies (TNCs), which use secrecy (tax) havens to hide unsavoury and, what ought to be illicit activities, that siphon of huge amounts of capital at the expense of the majority ordinary people particularly in emerging economies, including Mauritians.
Mauritius is a popular tax haven. Image source: Getty/Gallo
The effects of profits shifting extends way beyond the erosion of the tax base; it also results in wage evasion and declining resources for investment. Putting a stop to profit shifting is therefore critical in a context where we see growing inequality, the desperate need for increased social spending and greater investment.

To this end, immediate steps need to be taken to ensure greater transparency through the implementation of the ABCDs of transparency. These include:
  • Automatic exchange of information
  • Beneficial ownership information disclosure in public registries
  • Country-by-country, subsidiary-by-subsidiary reporting standard (implemented but information not public yet)
  • Disclosure of the tax returns of every South African

In addition it is critical that South Africa implements the General Anti-Tax Avoidance (GATA) Act. This will go a long way towards addressing the structural problem of tax under collection; a crucial step in addressing the problems of wage and tax evasion.

Moreover, it is essential that the South African government shows strong commitment to the long-term solution of a unitary tax system, while working on pragmatic medium-term solutions, such as the introduction of a global minimum effective corporate tax rate.

The Alternative Information and Development Centre (AIDC) has compiled a comprehensive study investigating the current state of tax and wage evasion in South Africa.

Read more: tax evasion, tax haven



Let's do Biz