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BRICS heads of tax authorities discuss challenges

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Revenue collection, anti-tax avoidance measures and dealing with illicit financial flows were some of the discussions at the BRICS Tax and Customs meeting in Johannesburg.

The BRICS heads of tax authorities say globalisation and the accompanying digitalisation means that businesses today transcend the borders of the nation.

This presents challenges to tax authorities as it gives rise to problems like profit shifting to avoid paying tax.

The BRICS heads of tax authorities met to decipher the challenges and share best practices to enable them to effectively fulfill their mandates of revenue collection.

The tax authorities were talking about the importance of cooperation in a fast changing world, finding solutions to common challenges like tax evasion, illicit financial flows and sharing enforcement strategies to ensure compliance.

They have agreed to continue the support for international initiatives to prevent base erosion and profit shifting.

South Africa’s tax revenue short fall is around R48.2 billion in 2018, Brazil is also failing to meet tax revenue targets.

Counterparts China and India, who are boasting high economic growth rates, recorded double digit increases in revenue collection.

While Russia, with an economy growing at a slow rate, has managed to record high increases in revenue collection saying this was achieved through efficient collection systems.

Others say while high economic growth has helped grow the tax base, different measures together with strict legislation have ensured compliance.

The countries say they are still exploring and doing research on how to best handle crypto currency.

They have agreed to establish the BRICS Capacity Building Mechanism to help deal with opportunities and challenges presented by the Fourth Industrial Revolution.

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