Cape Town - Finance Minister Pravin Gordhan said the country's fiscus was losing billions of rands under the guise of commercial transactions.
He said the National Treasury and South African Revenue Service (SARS) were set for "frank talk" with business and their advisers to get an assurance that they would not engage in activities that undermined the fiscus.
He said in most cases around the world and including South Africa, tax administrators were 10 years behind tax planners.
The minister, who addressed the media in Cape Town before tabling the Tax Administration Bill in Parliament on Thursday, said it was possible to build a relationship of trust with business.
Gordhan allayed concerns that they could be promoting an anti-investment climate in the country.
He said the bill was meant to protect the fiscus, ensure tax compliance and maintain checks and balances, among other things.
It would also lay a clear legislative foundation for modernising tax administration in the country, he said.
Gordhan warned that provisions in the bill meant that tax evaders "will have to face stricter enforcement, assessment and collection powers."
"The provisions in the Bill focus on the registration of taxpayers, return submissions, assessment procedures ... search and seizure provisions, provisions relating to the secrecy of the affairs of taxpayers and the processes for payment and collecting of outstanding tax.
"The Bill seeks to balance the powers and duties of SARS with the rights and obligations of the taxpayers in order to enhance equity and fairness in tax administration by providing a single body of law that outlines common procedures in a transparent relationship," he said.
Gordhan also proposed the establishment of a Tax Ombudsman to deal with taxpayer grievances, providing for search and seizure and collection powers of SARS.
He said that running parallel with the Bill, the "rewrite of Customs and Exercise Act, 1962, is at an advanced stage.
"The Customs Duty Bill and Customs Control Bill are currently being considered by the State Law Advisers and it is anticipated that they will be introduced into Parliament later this year."
