An international comparison of legislation aimed at the tax whistleblower

Abstract

Fraud seems to be prevalent in every country where there is a system of taxation. Whistleblowing is one of the many ways of combating fraud in taxation. The primary purpose of this study is to explore and compare the legislation aimed at the tax whistleblower. This research study focuses on the legislation of South Africa and the United States of America (USA) that is aimed at the protection of and the reward for the whistleblower. The objectives of this qualitative research study are achieved by comparing the legislation of South Africa with that of the USA, by reviewing the secondary literature on this topic and by conducting and analysing interviews with a selected group of respondents. The results of this study show support of the hypothesis that there is not enough protection in South Africa for a tax whistleblower as compared to the USA. Furthermore, the results of this study point to the fact that the principle of reward for a tax whistleblower that is found in the USA will not be an achievable solution to promote tax whistleblowing in South Africa. Finally, it was found that tax whistleblowing is engendered into the psyche and culture of the USA, without there necessarily being a fear for the life of the tax whistleblower. This does not seem to be the case for South Africa and therefore these findings promote further research into this subject.