The South African Revenue Service (SARS) through its Syndicated Tax & Customs Crime Division, carried out inspections as well as search and seizure operations on entities in the banking sector, tobacco and cigarette sector, alcohol, gold and clothing industries in KwaZulu-Natal, Western Cape and Gauteng. The premises inspected and searched include the residential premises of certain individual taxpayers and gold industry and banking employees. The operations are related to wider investigations and audits into illicit financial flows and illicit trade in gold, alcohol, clothing, cigarettes and tobacco products.
The objective of these interventions are twofold: firstly, they assist SARS with its verification processes for tax compliance and identifying information that may support such audits. Secondly, SARS may corroborate its evidence already at its disposal for potential criminal proceedings. These interventions were initiated after potential discrepancies were identified in customs declarations and tax returns related to such entities as well as bank statements that could not be relied on.
In one of the targeted entities, SARS obtained an order for a search and seizure of the premises of Bullion Star (Pty) Ltd on Monday 28 March 2021 in the North Gauteng High Court. Bullion Star is a gold refinery and has the facilities to transform minerals into a higher-value product, which can be sold locally or exported. Bullion Star is a registered exporter.
In contrast to Bullion Star’s previous returns submitted to SARS, the VAT return submitted for the 2022/02 period reflected a refund claim in the amount of R13.9 million. Prior to the end of January 2022, Bullion Star rarely exported any goods, but during February 2022, Bullion Star exported unwrought gold in excess of R126 million.
The above deviation caused Bullion Star to be selected for an audit of its tax affairs and the search warrant was executed in order to obtain information pertaining to the goods sold and exported by Bullion Star.
The warrant was executed at three premises. However, Bullion Star refused SARS access to its business premises and the vehicles on its premises. Security video footage revealed that goods were removed from the business premises and placed into vehicles on its premises, prior to SARS gaining access to the property. Based on the risk that these goods may be crucial to SARS’ investigation, with the assistance of the South African Police Service and the Directorate for Priority Crimes Investigation (Hawks), SARS seized relevant evidence from the vehicles. Similarly, the occupants of the residential property of Bullion Star’s director also refused SARS access to the residential property and to provide SARS with electronic equipment. The premises and telephone were believed to contain information vital to the investigation. SARS requested the assistance of SAPS to gain access to the premises and seized goods from the premises.
SARS encourages all taxpayers and traders to ensure that their tax and customs obligations are up to date and in compliance with the tax and customs laws. Furthermore, SARS would like to thank the SAPS and DPCI for working within the whole of government approach in making sure that these interventions were executed successfully.
SARS Commissioner, Mr Edward Kieswetter, reiterated the organization’s and broader government’s commitment to combatting illicit trade and criminal economic activities. He said, “Those persons that systematically and deliberately set out to deprive what is due to the fiscus through fraudulent and other non-compliant activities, will be confronted and dealt with in terms of the law. This kind of conduct will be made hard and costly.”
Information courtesy of SAAFF.