The Minister of Finance, Pravin Gordhan, announced in his Budget Speech on 17 February 2010 that legislation would be prepared to introduce a Voluntary Disclosure Programme (“VDP”) that would be effective from November 2010 to October 2011.

In his Medium-term Budget Policy Statement (MTBPS) on 27 October 2010 he said the following:
“Our capacity to pursue those who seek to evade tax obligations continues to be reinforced. Tax authorities the world over are co-operating more than ever before to throw open the veil of tax manipulation. South Africa has double taxation agreements with 70 jurisdictions which provide for extensive exchange of information between tax authorities. In addition, tax information exchange agreements have been agreed at officials’ level with six financial centres and a further sixteen agreements are being explored.

A joint audit made possible through these agreements has already yielded R3 billion in additional revenue. Combined with the growing availability and accuracy of third party data from financial institutions, employers and other sources, there are very few places for the non-compliant to hide.

We are, however, offering another opportunity for taxpayers to come clean and join the ranks of full participation in our democracy. The Voluntary Disclosure Programme, which allows for the waiving of penalties of up to 200 per cent for those who make a full, honest and voluntary disclosure of prior evasion, will begin next month.”

The aim of the VDP is to encourage applicants to disclose their defaults and to give them the opportunity to regularise their tax affairs (“Tax VDP”) and / or any contraventions under the Exchange Control Regulations (“Excon VDP”).

The overall VDP has two elements to it:

• The Tax VDP that will be administered by the South African Revenue Service (“SARS”) is being implemented in terms of the Voluntary Disclosure Programme and Taxation Laws Second Amendment Act (Act No.8 of 2010)
• The  Excon VDP that will be administered by the Financial Surveillance Department (VDP Unit) of the SARS.

To read more about the VDP, please see our documents, information and links on this website and contact us if you need any help.