By Thato Mahlangu
The South African Revenue Service (Sars) has been working hard to make sure that disobedient citizens are made to account for failure to comply with the law.
Sars, through a statement, said on 28 February 2020 it had won a 10-year battle court against a “non-compliant taxpayer” after the constitutional court dismissed the taxpayer’s application leave to appeal an eviction order. The taxpayer owed millions in taxes.
Sars commissioner Edward Kieswetter was quoted as saying he “welcomed the court victory against Gary van der Merwe and various entities he controls after a 10-year court battle which ended up in the Constitutional Court.”
The long-standing court battle arose from an investigation by the Financial Intelligence Centre which exposed suspicious transactions to the tune of approximately $15-million (R142-million). Holding that the application bore no reasonable prospect of success, the Constitutional Court dismissed Van der Merwe’s application for leave to appeal an eviction order requiring him to vacate his home, which is held by Zonnekus Mansion (Pty) Ltd.
The order made it possible for liquidators to finally take control of Zonnekus’ last remaining asset and sell the remaining property in order to recover the outstanding tax debt.
More actions taken by Sars
According to the National Prosecuting Authority, a couple was found guilty of fraud and money-laundering and sentenced to a combined 20 years in prison by the Durban Commercial Crime Court on 21 February 2020.
“Accused 1 was sentenced to 15 years direct imprisonment and accused 2 was sentenced to 5 years imprisonment in terms of Section 276 (1) (i) of the Criminal Procedure Act where she will serve 10 months in prison and thereafter be put into various programs meant to address the offences committed,” read the statement.
Sashin Sewpersadh and his wife Chantal both defrauded several people out of R10-million during the period of 2016 to 2017.
It is alleged that Sewpersadh purported to be an attorney or a conveyancer and convinced the unsuspecting people that he can sell certain properties in Phoenix and Umhlanga while his wife pleaded guilty to five counts of money laundering.
“The accused also pretended to be Sars agents and convinced one of the complainants that they could assist her with the payment of monies owed,” according to Sars.
NPA’s regional spokesperson Natasha Kara said the director of public prosecutions in KwaZulu-Natal, Advocate Elaine Zungu, had welcomed the sentence.
“Sentences of this nature show how seriously the courts view crimes of fraud and money laundering. Congratulations to the team involved in this successful prosecution.”
More arrests made
According to the Hawks, another couple was arrested on fraud charges.
The two accused, Riaz Rasool and his wife Emmashnie Rasool briefly appeared in the Durban Specialised Commercial Crime Court on Tuesday, 25 February, for fraud after they allegedly defrauded an unsuspecting investor out of R12-million.
It is alleged that the pair lured him to fund their business.
“The accused misled the complainant with fraudulent tender documents. They allegedly claimed that they were awarded a R32-million tender by the eThekwini Municipality to supply goods. They promised him lucrative returns on the tender, however, it was later discovered that there was no tender awarded to them,” according to the provincial spokesperson Captain Simphiwe Mhlongo.
Mhlongo said the couple were both granted R5 000 bail each and the case was postponed to 9 April 2020 pending further investigations.
Tax fraudsters sentenced
Luis Filipe Duarte D’Almeida Fernandes and Nazmien Warner, were both sentenced by the Cape High Court to 16 and 17 years in prison respectively.
They both pleaded guilty and a plea bargain was reached by the state. This comes after an in-depth investigation was concluded by the Criminal Investigation Unit of Sars in Cape Town.
The charges emanated from a R115-million VAT fraud scheme run by Fernandes and Warner between 2008 and 2015. The pair were found guilty on 487 counts of VAT fraud and alternative charges such as racketeering, money laundering and corruption in terms of the Prevention of Organised Crime Act (POCA).
According to Sars, Fernandes pleaded guilty to 471 charges relating to racketeering, fraud and corruption and for corrupting a Sars official.
“He was sentenced to 158 years of imprisonment. With sentences running concurrently, he will spend 17 years in jail. While Warner pleaded guilty to 409 charges, including to racketeering, fraud, and corruption in terms of POCA, he will serve an effective 16 years jail sentence.”
Warner was ordered to pay Sars R900 000 as well as the proceeds of the sale of nine properties, according to Sars.
Sars on non-complying taxpayers
Commenting on non-complying citizens, Kieswetter said Sars will make it costly for those who are determined to be non-compliant.
“We will also oppose vexatious and frivolous litigation up to the highest court of the land,” Kieswetter said.
Kieswetter said taxpayers who are willing to comply and pay their taxes will be assisted should they find any problems with the process.
“Sars would take a tough stand against wilfully defaulting taxpayers and bring them to book, no matter how big the challenge. Other recent court victories involving fraudulent VAT refunds also attest to this resolve on the part of Sars to deal with tax criminals. In all, more than 80 individuals have received lengthy jail terms for defrauding Sars.”
No fear or favour in law enforcement
Kieswetter said tax crime, just like corruption, is not a victimless crime, as it directly affects the poorest of the poor who are dependent on basic services, including a social security safety net for old age pensioners and child grants as well as the provision of housing and education amongst others.
“Sars is, therefore, determined to enforce the tax and customs laws of the country without fear or favour in a responsible manner when all other legal avenues have been exhausted. This victory confirms Sars’ unwavering commitment to up-root any non-compliant behaviour,” he said.