As customs organisations around the world continued to modernise, they also needed to find ways of improving safety and security, said South African Revenue Service (Sars) Commissioner Edward Kieswetter. “Sadly the risks that come with modernisation are characterised by an increase in organised crime and security-related threats, with a proliferation of fraudulent practices such as illicit trade, smuggling, under-invoicing and tariff misclassification to name a few.” Speaking in Cape Town at the annual World Congress of the International Federation of Freight Forwarders’ Associations (Fiata), Kieswetter said just as technology-driven, disruptive innovations had given rise to unprecedented business models and trade value chains, it had also introduced significant complexity to cross-border trade flows. “Factors such as virtual borders, growing trade between connected parties, and questionable morality by intermediaries pose material risks to revenue authorities such as ourselves and have increased exponentially, with increased threats to the collection of duties and taxes through blatant evasion and aggressive avoidance,” he said. “This also has significant downstream negative implications for the erosion of our domestic economies through the distortion of the integrity of the economic factors for fair competition.” Kieswetter said the challenge for revenue authorities was not just in dealing with the growing threats it was facing, but doing so in such a manner that it was still creating conditions for economic growth and facilitating trade with international partners and countries. This, he said, was not always easy when having to provide adequate protection of borders, as well as secure and protect citizens from the entry of unsafe and high-risk consumer products, food and medicines from unscrupulous players. “This requires a fine balance between service and trade facilitation on the one hand, and stringent enforcement of compliance on the other,” he said. According to Kieswetter, for its part the revenue service undertook to provide clarity and certainty to stakeholders of their obligation in law, while it would also do as much as possible to make it easy, simple and eventually seamless for those who choose to comply. “But equally we will create a credible threat of detection and make it hard and costly for those who choose not to comply.”
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Factors such as virtual borders and growing trade between connected parties pose material risks to revenue authorities. – Edward Kieswetter