South Africa: SARS Enforcement and Customs Operations for January 2013

press release

The South African Revenue Service (SARS) is providing an update to the media and the public on its operations to combat crimes such as smuggling, fraud and abuse of the tax system for the month of January 2013.

The aim is to inform the public about the work SARS' Customs and Enforcement teams do on a daily basis, to provide an indication of the prevalence of tax and customs-related offence in South Africa, and to illustrate the support SARS provides to other law enforcement agencies.

Interventions to combat fraud and corruption:

SARS will continue to combat any form of corruption, fraud and abuse of the tax system. The following cases can be reported for January 2013:

1. On 11 January a SARS employee was arrested on allegations of VAT fraud. He is linked to the illegal registration of over 200 companies for (fraudulent) VAT refunds between 2010 and 2012. It appears the employee was paid for every fraudulent VAT number he created. He has not yet appeared in court and the investigation is on-going.

2. A SARS employee resigned when informed that he would be required to face a disciplinary hearing (scheduled for 16 January) on charges of filing fraudulent tax returns 'on behalf of' an (unknowing) taxpayer, claiming fraudulent tax credits. A criminal investigation is on-going.

3. A SARS Customs official was dismissed on 22 January for being in a corrupt relationship with another SARS employee (who had resigned on 14 December 2012) and a private customs clearing agent. Her bank account had been used by the clearing agent to deposit a bribe for the second employee. Criminal cases will be pursued.

4. On 28 January a SARS employee was arrested, charged and appeared in the Pretoria Commercial Crimes Court on charges of participating in the diversion of a VAT account. A second person was also arrested and charged with fraud and corruption on the same matter. A third individual is still to be arrested in this regard.

5. On 30 January a SARS employee resigned after being served with a disciplinary charge sheet alleging that he defrauded a taxpayer on the pretence that he would assist in procuring bookkeeping services for that individual. A criminal investigation is on-going.

6. On 31 January a Pretoria resident was arrested in a joint operation by the "Hawks" and SARS on charges relating to attempted tax refund fraud. The individual is a person of interest in a number of other cases currently being investigated. A SARS employee found in the company of this individual, and thought to be involved in some of the other cases, was also arrested. They are yet to appear in the Pretoria Regional Court.

7. On 25 January 2013, Ms Gretha Wilson was sentenced to 30 months of correctional supervision and house arrest, and four years of imprisonment wholly suspended for 5 years. She had been found guilty on 22 October 2012 on 6 charges of fraud and forgery relating to the provision of false tax clearance certificates for a private company tendering for government contracts. The veracity of the certificates was questioned by the relevant Supply Chain Management office, and an investigation followed.

Customs Interventions

In the period from 1 to 31 January 2013, SARS Customs teams have:

1. Prevented just over 23 kilos of narcotics (21.2kg cocaine and 1.81kg heroin) valued at just over R6 million from entering the country. In all cases, the drugs seized and the individuals involved were handed over to the SAPS at OR Tambo International for further action. The drugs were seized in 10 different interventions, and included:

a. 1.9kg cocaine, worth R550 000, found in an abandoned body wrap on a flight arriving in Johannesburg from Sao Paulo.

b. 1.48kg cocaine, worth R408 150, found after Detector Dog "April" reacted to the luggage of a male passenger arriving in Johannesburg from Sao Paulo. His luggage was searched, and after "April" reacted again to jackets in his luggage, the cocaine was found concealed in the jacket linings.

c. 2.46kg cocaine, worth R680 000, found in the luggage of a male passenger disembarking in Johannesburg from Sao Paulo. The drugs were concealed in the soles of a number of pairs of sandals.

d. 2.85kg cocaine, worth R773 840, found in the luggage of a male passenger in transit from Sao Paulo to Hong Kong. The cocaine was concealed in the soles of shoes and the linings of jackets.

e. 6kg cocaine, worth R1 608 606, found in two pieces of unclaimed luggage which arrived in Argentina from Johannesburg, and was brought to Customs for inspection by airline staff. The inspection found hardened, starched clothes which had been soaked in liquid cocaine.

f. 1.81kg heroin, worth R365 275, found in the hand luggage of a male passenger travelling from Doha to Johannesburg. The passenger

was identified for further checks after it was discovered he was travelling only with hand luggage. The heroin was concealed in the soles of a pair of shoes.

g. 2.5kg cocaine, worth R680 000, found in a body wrap worn by a female passenger travelling from Sao Paulo to Johannesburg

h. 3.82kg cocaine, worth R1 039 422, in a body wrap that was concealed in the hand luggage of a male passenger travelling from Sao Paulo to Johannesburg.

2. Stopped 5858 "Viagra" tablets, valued at over R585 000, coming through the ports of entry (mainly sent in parcels from overseas to South African addresses).

3. Seized 30 619 steroid tablets and ampoules, worth R161 100, couriered in parcels from China to South Africa.

4. Detained 90 master cases and 23 194 cartons of cigarettes which were being smuggled into the country.

a. The biggest seizure saw 17 065 cartons of "Dullah" and "Remington" cigarettes, valued at R2 201 385 stopped by the SARS team at Beit Bridge border post. Intelligence had been received about a smuggling attempt on the night of 27th January, and after some searching a truck was found abandoned at a garage on the N1 highway. The cigarettes had been concealed in the truck, which had been declared empty at Customs.

b. A second significant seizure was of 90 Master Cases (900 000 individual cigarettes) of "Sasha" and "Caspian" cigarettes, worth R737 538. They were found in a false compartment in a truck crossing into South Africa at the Kopfontein border post from Botswana

5. Prevented the following from leaving the country:

a. Nine cellphones hidden in sports shoes, in a postal parcel from South Africa to Tanzania

b. 294 cashiers cheques valued at R7 993 600 in a parcel from South Africa to the United States

6. Seized a number of other items coming into the country, including:

a. 30613 "steroid" tablets and ampoules in packages from China to South Africa, valued at around R161 100

b. A card skimming device found in a package couriered from the USA to South Africa

c. Seventeen South African entry visas, copies of South African residence and asylum seeker permits, all of which were handed over to Home Affairs and confirmed fake by them. The documents were found in two separate incidents where suspicious parcels at courier companies were searched.

d. R191 000 in South African notes which was found in a lorry crossing into South Africa from Zimbabwe at Beit Bridge and which had not been declared. The cash was seized for the SA Reserve Bank.

e. Two white diamonds which were hidden in "business documentation" posted form the USA to South Africa and which were not declared. They have been detained for further investigation by the Diamond Board.

f. 30 Marijuana seeds sent to South Africa from a mail order company in Granada (West Indies) which appears to "specialise" in this product.

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