Global Trade Regulatory Services - South Africa Service Sheet
The impact of COVID-19 on African countries resulted in unprecedented fiscal demands for governments already subjected to increased health, socio-political and economic risks.
The challenges of balancing economic recovery with effective revenue collection efforts leads to increased scrutiny of taxpayers in highly regulated industries e.g. oil and gas, mining, alcoholic beverages and tobacco..
Mounting fiscal pressures give rise to audits by revenue authorities, primarily focussing on false customs declarations, under-valuation of goods, incorrect treatment of royalties and licence fees, tariff classification and the utilisation of import and export permits by third parties.
Given the complexity of most regulated industries audits are conducted by revenue authorities with limited understanding of the taxpayers’ specific ERP systems, the industry in which it operates as well as accurate scrutiny of publicly available data, usually generated by governmental institutions.
The latter results in massive assessments based on unscientific sampling of data and documentation of importers, exporters and third-party service providers such as clearing and freight forwarding agents. In addition, revenue authorities resort to unsubstantiated demands to raise forfeiture, attachments on property and bank accounts at financial institutions as well as termination of regulatory governed licences whilst subjecting taxpayers to lengthy litigious proceedings. The matters are complex and in almost all the instances involve cross-border and inter-continental transactions. Therefore, requiring in-depth experience and expertise on a global scale.
There are a variety of risks compliant taxpayers face under the circumstances and the risks can manifest itself in threatening the life and existence of the taxpayers being targeted, due to the magnitude of claims and market activity and transactions involved.
July 22, 2021
Senior Managing Director
Forensic & Litigation Consulting