Sars ignored fraudulent VAT claims, says DA

REPORTS: GUPTA-LINKED ENTITIES BENEFIT

But SA small businesses battle to get rebates from the receiver of revenue, says DA.

While the SA Revenue Service (Sars) was putting jobs at risk by delaying VAT refunds to small businesses, it now appears Sars might have overlooked, “perhaps deliberately”, fraudulent VAT claims in the region of R100 million submitted by Gupta-linked people, the DA claimed yesterday.

This followed media reports alleging the receiver paid out R100 million in fraudulent VAT refunds to people and/ or entities linked to the Gupta family.

“This simply indicates ... Sars’ systems are either not working or have deliberately been subverted by insiders at Sars,” said DA spokesperson Alf Lees.

The DA would ask Yunus Carrim, chairperson of parliament’s standing committee on finance, to request that the parliamentary legal services provide the committee with an opinion on possible limitations to the disclosure limitations as contained in chapter 6 of the Tax Administration Act, he said.

“There must surely be questions to be asked as to how the members and or directors of Shaz Trading could have amassed the array of assets that are listed in the media report, and amount to in excess of the R61.8 million allegedly frozen by the Asset Forfeiture Unit,” Lees said.

These assets included nine houses in Centurion, watches worth R5.2 million, a farm, and four other houses.

This enormous wealth in assets indicated that Shaz Trading must have been so successful that it was able to pay its members, or directors – members of the Joosab family – enormous salaries, directors’ fees, or dividends. This did not seem plausible and the obvious question was whether Sars had done lifestyle audits of all the persons involved.

It took the DA years of pushing and, finally, the tax ombud, to expose that Sars was deliberately manipulating delays in the refunds of VAT and other taxes of relatively small amounts, that were putting small businesses in jeopardy or in some cases, out of business.

“While Sars was putting jobs at risk by delaying VAT refunds to small businesses, it now appears that Sars simply seems to have overlooked, perhaps deliberately, fraudulent VAT claims in the region of R100 million submitted by Gupta-linked and suspiciously very wealthy, persons,” Lees said.

“There will no doubt be the standard Sars response about taxpayer confidentiality when we raise the reported R100 million fraudulent VAT refunds with Minister of Finance Nhlanhla Nene, but we would fail in our constitutional responsibility if we do not raise it.

“The DA will now find a way of testing the legal extent of the disclosure limitations of chapter 6 of the Tax Administration Act No 28 of 2011,” Lees said. – ANA

Sars’ systems are either not working or have deliberately been subverted by insiders.