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SARS, law enforcement clamp down on coal smuggling syndicate

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The South African Revenue Service (SARS) and various inter-governmental organisations have clamped down on a sophisticated criminal syndicate of alleged coal-smugglers, who played a major role in exacerbating the energy crisis and load shedding.

Leading the search and seizure operation, SARS says information became available regarding a host of tax crimes allegedly committed by members of the coal-smuggling syndicate.

In a statement, SARS says: “The success of today’s operation is due to exceptional inter-governmental co-operation and information-sharing under the auspices of the NATJOINTS Energy Safety & Security Priority Committee tasked with unmasking and bringing to book the criminals that have caused economic hardship and personal hardship to all citizens of the country.”

“It is due to such hard work, often behind the scenes, that leads to these investigative breakthroughs and ensures that South Africans can return to a lifestyle without loads shedding. These targeted operations also help to prevent the loss of revenue to the fiscus, which in this case amounted to more than R500-million.”

SARS says the alleged coal smugglers and their related entities are active and have a presence across Gauteng; Mpumalanga; KwaZulu-Natal; the Free State and Limpopo.

The suspects targeted include former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.

SARS says it has managed to establish links between individuals and related entities and confirmed possible gross contraventions from a tax perspective, including, non-registration for Income Tax, VAT and/or PAYE, failure to submit tax returns, under-declaration of income, claiming undue VAT refunds; and making fraudulent submissions.

SARS further says: “The sophisticated network of coal smugglers is suspected to consist of local and foreign nationals. Coal trucks destined for power stations are diverted to designated coal yards where high-grade coal is replaced with low-grade or sub-standard product. The high-grade coal is then exported or sold to willing buyers. The low-grade coal is often blended with scrap or other materials and then delivered to power stations.”

The low-grade coal damages the infrastructure at the Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid.

SARS Commissioner, Edward Kieswetter, commended the country’s law enforcement agencies for this massive breakthrough in ongoing investigations.

“it is because of such naked greed that the country has experienced unprecedented load shedding, which harms business, undermines foreign direct investment and leads to job losses – all of which negatively affect revenue collection”.

“All law enforcement agencies must continue their aggressive fight against criminality, each according to its mandate. For its part, SARS will continue to pursue taxpayers involved in intentional and wilful non-compliance – without fear, favour, or prejudice,” Kieswetter adds.

 

 

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