Legislation: Unexplained wealth law gets broad backing

Several agencies involved in fighting corruption have agreed that SA needs legislation that would allow them to investigate unexplained wealth. A Business Day report says experts from the Organisation for Economic Co-operation and Development (OECD) who participated in a workshop with the heads of these agencies last month have encouraged them to pilot and test the proposals on unexplained wealth, which refers to the possession of assets with a value far in excess of a person’s declared income. SARS Commissioner Edward Kieswetter said while the tax authority had ways to investigate unexplained wealth by using algorithms to look at information such as property, motor vehicle and beneficial ownership, its investigations were limited to tax audits under the Tax Administration Act. It cannot conduct a fishing expedition. Having a separate law in place would allow other agencies – such as the Financial Intelligence Centre (FIC) – to investigate unexplained wealth and for there to be an interagency response. ‘There is strong support between the agencies to finalize a proposal and present it for consideration,’ Kieswetter said. He noted that last year SARS identified about 26 000 individuals who demonstrated economic activity above R1m a year who had not registered as taxpayers. The agencies represented at the three-day workshop hosted by SARS included the Treasury, the NPA, the Hawks, the FIC, the Financial Sector Conduct Authority, the Reserve Bank, and the SIU. About 40 officials attended, including Kieswetter, NDPP Shamila Batohi and the head of the Hawks, Godfrey Lebeya.