He said SA and Africa as a whole were negatively affected by what is called base erosion and profit shifting - the process of transferring profits to a low-tax regime in order to pay less tax.
"We already have according to SARS (South African Revenue Service) several cases of base erosion and profit shifting, which impact on billions of rands of tax which is payable to SA authorities‚" he said.
Gordhan quoted the best-known example of the practice‚ from the UK. "Starbucks paid tax authorities a mere £8.5m on coffee sales of nearly £3bn in a case that evoked lots of public response and emotion‚" Gordhan said.
SA is currently the only African country in the G20 - a group of the world's leading economies - but both the African Development Bank and the New Partnership for Africa's Development have seats in the body. Between them they act to promote and protect African interests in the global debate about tax.
"Think of how many African governments could do with this extra tax revenue. Africa could be fundamentally better with more schools‚ more infrastructure and more economic activity‚" Gordhan‚ himself a former SARS Commissioner‚ said.
"Without the tax that should be coming from corporates‚ governments are forced to raise tax rates on individuals or cut spending‚" he said.
As part of steps to harmonise the rules in the international economy‚ and level the global playing field in the process‚ the G20 have agreed to establish a means to exchange tax information among themselves by 2015. This will mean tax authorities have the same information to work with.
"We endorse the aspiration of automatic exchange becoming a global standard. SA has gone further and we will be early implementers of the standard with Australia‚ France‚ Germany‚ Italy‚ Mexico‚ Spain and the UK‚" Gordhan said.
SA currently chairs the Global Forum on Tax Transparency and Exchange of Information.
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