SCOF must investigate SARS’ role in VAT refunds – Alf Lees

DA MP says R100m paid out in fraudulent VAT refunds to people linked to Guptas

DA urges SCOF to investigate SARS’ role in VAT refunds

30 April 2018

The DA will write to the Chairperson of the Standing Committee on Finance, Yunus Carrin, 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 No. 28 of 2011.

This comes on the back of media reports today alleging that the South African Reserve Service (SARS) paid out R 100 million in fraudulent VAT refunds to people and/or entities linked to the Guptas. This simply indicates that the SARS systems are either not working or have deliberately been subverted by insiders at SARS.

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 R 61,8 million allegedly frozen by the Asset Forfeiture unit.

These assets include nine houses in Centurion, watches worth R 5,2 million, a farm and four other houses. This enormous wealth in assets indicates that Shaz Trading must have been so successful that it was able to pay its members/directors, members of the Joosab family, enormous salaries, directors fees or dividends. This does not seem plausible and the obvious question is whether or not SARS has done lifestyle audits of all the persons involved?

It took the DA years of pushing and finally the Tax Ombud to expose that SARS were 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.

Whilst 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.

There will no doubt be the standard SARS response about taxpayer confidentiality when we raise the reported R 100million fraudulent VAT refunds with the 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 that prevent the details of seemingly fraudulent tax matters already in the public domain being made public.

Issued by Alf LeesDA Shadow Deputy Minister of Finance, 30 April 2018