By: Natasha Archary
Hiding assets from the State is not a new practice, and it’s how the rich and corrupt stay well, rich and corrupt.
Steven Powell, Head of ENSafrica’s Forensics Practice joins Gugulethu Mfuphi on Kaya Biz to talk about the common ways the rich avoid tax with shady dealings.
“The schemes that fraudsters come up with are never-ending and as the authorities close down loopholes and identify some of the modus operandi, new ideas and techniques are brought to the fore to conceal assets.
Authorities like the South African Revenue Service (SARS), the Asset Forfeiture Unit (AFU) and the Special Investigating Unit (SIU) are well aware of the different methods these corrupt individuals use to try and conceal their assets.”
Wealthy individuals often employ various strategies to conceal assets from government authorities, aiming to minimize taxes or evade legal scrutiny.
One common method is setting up offshore accounts in jurisdictions with strict privacy laws, making it difficult for tax authorities to trace financial activities.
They may also establish shell companies that obscure the true ownership of assets, thereby protecting the identity of the real owner.
Another tactic involves transferring wealth into trusts, which can be structured in ways that separate legal ownership from beneficial ownership, thus shielding assets from being directly linked to the individual.
Additionally, investing in high-value physical assets like art, jewelry, or real estate can serve as a means to store wealth in less transparent forms. These methods, while often legal, are scrutinized for potentially facilitating tax evasion and financial misconduct.
Listen to the conversation on Kaya Biz:
Also read: Make it make sense: Dealing with illegal property hijackings
