The South African Revenue Service (SARS) has warned officials and the public against defrauding the entity as action will be taken against those engaged in crime.
“SARS is meeting its strategic goal of making it difficult and costly for those who choose to engage with SARS,” SARS Commissioner Edward Kieswetter said Wednesday.
His comments come after a customs broker and his co-defendants were charged with fraud and various violations of the Customs and Excise Act.
Jayson Perumal (43) of Dynamic Freight and Reshlan Pillay (38) recently appeared in the Durban Commercial Crimes Court in a customs and excise related fraud case. The case has been adjourned to October 20, 2022 and both suspects have been released on bail.
“SARS wants to warn clearing agents that if arrested they will face the full power of the law. At the same time, SARS also wants to warn the public, especially importers, to be vigilant when entering into contracts with clearing agents.
“They must be aware of the correct duties and VAT to be paid, and ensure that those amounts have actually been paid to SARS. According to the Customs and Excise Act, the importer is ultimately liable for the import duties and VAT owed to SARS,’ according to the tax authorities.
It is alleged that Pillay, director of Potenza Capital, and a customs broker, processed customs declarations while working with Perumal of Dynamic Freight, acting on behalf of several importers.
Potenza Capital allegedly filed false documents with SARS, falsifying the values of the goods, the goods themselves and the details of the importers, resulting in minimal import duties and VAT payments to SARS.
“Importers should demand proof of their payments to SARS, in relation to their import, from clearing agents. SARS has found that some customs brokers willfully declare up to 90% below the value of goods by falsifying import documents.
“However, they would claim the appropriate duty and VAT from their customers while paying SARS the minimum duty and VAT. The clearing agents would then cash in the difference, enabling the low rates for their services, while defrauding both SARS and the importer,” SARS said.
SARS said the importer would be penalized twice if SARS audits these transactions and charges the correct amount of VAT and duties to be paid by the importer.
It has expressed concern about the scale of this scam as investigations into similar schemes worth millions of rands are currently under investigation in Gauteng and in the Western Cape.
“It is critical that all role players act with caution and fairness when dealing with SARS,” Kieswetter said.
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