The Economic Freedom Fighters (EFF) are working on a private member’s bill to combat what the party sees as legal loopholes allowing big business to get away with paying their taxes, Fin24 has reported.
This is according to the government gazette, which on Thursday announced the party’s plan to table the Draft Anti-Avoidance of Tax Bill, 2018.
EFF deputy president Floyd Shivambu wants to introduce “robust and up to date” tax laws, to combat his party’s view that both multinational companies active in SA and local companies listed on the global stock exchange are engaged in chronic and continuous “aggressive tax avoidance” which is costing the country “billions of rands in tax revenue.”
With his draft bill, he is seeking to introduce strong penalties that will deter companies in practicing aggressive tax avoidance.
“The Report of the High-Level Panel on Illicit Financial Flows from Africa found that between 1970 and 2008, South Africa lost R1.208 trillion because of aggressive tax avoidance,” writes Shivambu.
“Yet,” he continues, “very few tax avoidance cases have been taken to court, as the current tax laws are outdated and do not account for the fact that the difference between illegal tax evasion and legal tax avoidance is more blurred than ever due to current economic policies and the financialisation of the world economy.”
Shivambu also stressed that the distinction between tax evasion, which is illegal, and tax avoidance, which is legal, must be clearly understood.
He says that legal tax avoidance enables billions of rands to exit SA illegally.
The bill is one of three the EFF is set to introduce. A draft insourcing bill will be introduced by the party’s MP Hlengiwe Mkhaliphi and a bill seeking to ban alcohol advertising will also be introduced, by EFF MP Veronica Ntombovuyo Mente.
When exactly the draft bills will be introduced is not yet clear.