Hon Speaker, hon members, at the recent high- level meeting of the United Nations Economic Commission for Africa, Uneca, it was estimated that an amount of US$50 billion is exported out of the African continent illegally every year. This is done through tax evasion, incorrect invoicing, import overpricing and the underpricing of exports. According to information given to the African Union, the countries most affected are South Africa, Algeria, Egypt, Morocco and Nigeria.
The flow of illicit finance severely undermines the possibilities for socioeconomic development across the continent. It reduces tax collection, cancels investment, and undermines free trade as it removes resources that could otherwise be used for poverty alleviation and economic growth.
Government has measures in place to address this challenge. The financial surveillance department of the SA Reserve Bank, responsible for the administration of exchange control, continues to detect and deal with unlawful financial outflows by people who bypass restrictions placed on the movement of funds exceeding certain thresholds.
In addition, the Financial Intelligence Centre processes information from a range of financial institutions, such as banks, in order to prevent money laundering and terror financing. In the previous financial year, the centre referred cases to the value of R66,1 billion to law enforcement agencies and the SA Revenue Service, Sars, for investigation.
The SA Revenue Service has also achieved significant success in identifying, seizing - where appropriate - and prosecuting those involved in illegal importing, under-invoicing and over-invoicing of imports and exports, as well as value-added tax fraud. During the current financial year, Sars has already confiscated 1,4 million articles of clothing and footwear valued at almost R580 million. It has seized drugs worth R139 million and 683 million sticks of cigarettes valued at R180 million. In addition, Sars has offered an amnesty to encourage culprits to come forward.
Government will work with the United Nations Economic Commission for Africa to contribute to stemming the tide of the illicit financial outflows from South Africa. I thank you, hon Speaker. [Applause.]