SARS flags massive tax fraud scheme
The SARS has conducted a wide-ranging confidential investigation into the second-hand gold industry and found what appears to be a multibillion-rand tax fraud scheme.
The Daily Maverick reports that the scheme is immense with just two companies claiming R24.4bn between 2012 and March 2020 in allegedly fraudulent VAT refunds.
That’s according to an affidavit filed by SARS in the Gauteng High Court (Johannesburg).
The two companies appear to have scored illegitimate VAT refunds of over R8bn in 2019 alone – roughly 0.5% of SARS’ entire tax collection for the year.
The scheme laid out by SARS is simple in principle.
Gold exports are zero-rated for VAT. Buying gold scrap locally, however, carries the standard 15% VAT.
Key to the scheme is introducing untaxed gold into the supply chain and faking VAT payments for this gold.
One of the two companies cited is Rappa Resources, a Germiston-based gold trader that went to court after SARS withheld VAT refunds totalling R1.8bn purportedly owed to the company for February to June 2020.
The case has forced SARS to reveal details about its closely guarded investigation.
SARS subsequently raised a gargantuan assessment of R7bn against Rappa for its allegedly illegitimate VAT claims between January 2019 and March 2020 which Rappa has challenged.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
