Home South African Sars has sights on 52 firms linked to R1bn Covid contracts

Sars has sights on 52 firms linked to R1bn Covid contracts

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“It seems to be patently obvious that some companies are operating outside the law, seeking to profit from a devastating pandemic that is affecting the lives and livelihoods of millions of South Africans, especially the poor and vulnerable.”

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THE SA Revenue Service (Sars) says it has focused on 52 non-compliant companies that received R1 billion in contracts for the supply of personal protective equipment (PPE) and other Covid-19 related services.

To date, 11 companies have been convicted, seven cases are currently on the court roll, 29 cases are with the National Prosecution Authority (NPA) for the drafting of charge sheets and/or warrants of arrest, while five case dockets are being processed by the Hawks.

Sars said it has recovered R170 million in unpaid taxes linked to PPE contracts and R500 million in assets, including cash, are under preservation orders. Sars is also investigating 33 entities linked to politically-exposed persons.

In addition, several companies that received government tenders totalling R50 million for Covid-19 related services were recently sentenced for not registering for Value-Added Tax (VAT).

The companies were awarded tenders for decontamination and deep cleansing of schools by the Gauteng Department of Education. Another company was awarded a tender by the KwaZulu-Natal Department of Social Development for provision of hygiene equipment and consumables.

The companies were convicted and sentenced in the Durban District Court last week. The sentences range from five months’ to 10 months’ imprisonment (with the option of a fine). The cases follow similar convictions in Gauteng and the Free State.

Commissioner Edward Kieswetter said Sars is committed to working with all enforcement agencies to ensure increasing tax and customs compliance.

“It seems to be patently obvious that some companies are operating outside the law, seeking to profit from a devastating pandemic that is affecting the lives and livelihoods of millions of South Africans, especially the poor and vulnerable. Sadly, most of the looted funds are being used to finance lavish lifestyles.

“Sars will continue to detect and make it costly for those who engage in this form of non-compliance. The government relies on Sars to collect taxes so as to provide services such as social relief to older persons, vulnerable individuals and households. A tax crime is in reality a crime that robs the poor and vulnerable,” Kieswetter said.

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