International Business & Economics Research Journal –Second Quarter 2018 Volume 17, Number 2 Copyright by author(s); CC-BY 9 The Clute Institute Developments In Exchange Of Information In Tax Matters Within SADC: A Move Towards Tackling Tax Fraud In Southern Africa Puseletso Letete, University of South Africa, South Africa ABSTRACT In recent years around the world, it is apparent that the need for mutual assistance between states is increasing and gaining support. The Organisation for Economic Cooperation and Development (OECD) has been in the lead of this effort. This approach has also been prevalent in Africa, particularly in the Southern African Development Community (SADC) which is viewed in the context of strengthening economic integration and cooperation in the region. Recently, there has been extensive commitment by many jurisdictions around the world to eradicate problems to the exchange of information in tax matters by approving and supporting the international standard on transparency and exchange of information. The regional organisations in Sub-Saharan Africa have engaged in new trends in tax policy and administration. This has seen the adoption of agreements to regulate exchange of information in tax matters which is the subject of the present enquiry. Keywords: SADC; Tax Policy; Information Exchange Regulations INTRODUCTION ecently most African governments have shown increasing support for regional integration and they have regarded it as an important part of their development policies and plans (Hartzenberg, 2011). In this context, regional integration is seen as an important aspect of “economic development and economic integration for developing countries in the global economy” (Letete, 2012). As a result of the growth of regional integration and increasing globalisation, member countries to regional organisations and trading blocs, are under pressure to strengthen their economic integration and their tax administration (this principle is incorporated in the VAT agreement between South Africa and Lesotho on mutual assistance and co-operation and the prevention of fiscal evasion with respect to value-added tax, available at www.sars.gov.za). The developments over the last few years, have shown that “with taxpayers operating on a global basis, the problem of tax fraud has also increased globally” (Seer, 2013). In order to tackle this problem, tax authorities have reviewed their traditional approach which was focused on bilateral cooperation to a more inclusive approach of a wider community of states in the form of multilateral cooperation. This has also involved the shift of focus from exchange of information on request to other closer forms of cooperation, such as spontaneous exchange of information sharing (www.sars.gov.za). This has been done as an effort to deal with international tax avoidance or cross-border tax avoidance (Pross and Russo, 2012). This is to ensure that tax laws are no longer confined to individual jurisdictions but they can have legal authority to apply in other countries in order to address the challenges which are brought about by international tax avoidance schemes. There is no doubt that international tax avoidance schemes do not have any boundaries. However, on the other hand, the issue which arises as a result of these efforts is, the relevance of the traditional approach of the principle of tax sovereignty, which recognises that the state’s right to tax extends up to the border posts. It is an established principle of international tax law that, a state has the right to tax only within its sovereign borders. It seems that this new approach challenges this traditional ‘tax sovereignty’ principle. R