The South African Revenue Service (SARS) is providing an update to the media and the public on its operations to combat crimes such as smuggling, fraud and abuse of the tax system for the month of May 2014.
The aim is to inform the public about the work SARS’ Customs and Enforcement teams do on a daily basis, to provide an indication of the prevalence of tax and customs-related offences in South Africa, and to illustrate the support SARS provides to other law enforcement agencies.
Interventions to combat Fraud and Corruption SARS will combat any form of corruption, fraud and abuse of the tax system. The following cases can be reported for May 2014:
On 16 May, Mr Mario van Wyk (trading as Ultimate Customs and Excise Clearing and Consulting) pleaded guilty in the Johannesburg Regional Court to fraud charges emanating from the submission of false Customs documents and declarations using fraudulently created SARS letterheads during February and March 2010. He was sentenced to a fine of R20 000 or 2 years imprisonment, with another 2 years imprisonment being wholly suspended.
As previously reported, on 22 May the North Gauteng High Court granted SARS a final preservation order in the ongoing civil case against Mr Radovan Krejcir. Preservation orders enable SARS to preserve assets when there are outstanding tax liabilities. More specifically these provisions are applied when there is a real risk of the dissipation of assets or where there is a risk that the taxpayer could dispose of assets or put assets out of the reach of SARS’ collection efforts.
On 26 May, the Cape Town Regional Court sentenced Mr PG Firstbrook to five years imprisonment after he had pleaded guilty to 78 charges, including failure to submit PIT returns, failure to submit VAT 201 returns, VAT fraud to a value of over R475 000 and fraud to the same amount. This case has a long history – in 2000 Mr Firstbrook (trading as 584 Distributors) was deregistered because of his failure to submit VAT and PIT returns. He then proceeded to trade as an individual, using the deregistered VAT number, and charging VAT which he did not remit to SARS.
On 29 May Mr Gerhardus Prinsloo pleaded guilty in the Bloemfontein High Court to 75 counts of fraud, with the loss to the fiscus being over R1.9 million. Mr Prinsloo had, over the period April 2011 to April 2013, misled 75 farmers into defrauding SARS by declaring livestock transactions as maize, grass and feed sales which do not attract VAT charges. He was sentenced to a fine of R600 000 or 6 years in jail, of which R200 000 or 2 years in jail were wholly suspended.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.