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Fake tax consultants held in R7m scam

Taxpayers must be careful about who they entrust with
their details




THE HAWKS have arrested 23 bogus tax consultants – including a teenage university student – for defrauding the SA Revenue Service of more than R7 million in tax claims.

The syndicate allegedly colluded with government employees, mostly teachers, to submit inflated tax return claims and then pocketed the cash between themselves and their “clients”.

The police are looking for 37 other syndicate members, all believed to be from Mpumalanga.

Hawks spokesman Captain Paul Ramaloko said the fraud was committed between May and December last year.

Ramaloko said the refunds from Sars ranged between R8 000 and R36 000, and the alleged fraudsters had demanded 20 percent.

He said a 19-year-old economics student at the Tshwane University of Technology was among the 23 suspects arrested yesterday. She was arrested in Pretoria.

The rest were arrested in and around Mbombela in Mpumalanga in an early-morning sting operation yesterday.

The suspects, from the Ehlanzeni and Bohlabela education districts, were arrested at their workplaces. Some of the teachers were found at school, while others were arrested at the circuit offices. A few evaded arrest by fleeing.

In all, Ramaloko said, the police were seeking 60 fraudsters connected to the syndicate.
“We have warrants for their arrest and it’s only a matter of time before we arrest them.”

Sars spokeswoman Marika Muller said the suspects were private individuals and not Sars employees.

“It is possible that the arrested individuals were tax practitioners or masquerading as such. Qualified and registered tax practitioners offer a service to taxpayers by assisting them with their tax affairs and with submitting tax returns to Sars. Unfortunately, a minority of those might be dishonest,” she said.

“Additionally, some individuals pretend to be tax practitioners with the intention of defrauding Sars and the unknowing taxpayer.”

Muller confirmed that the defrauded amount was more than R7m. “This is not just a loss to Sars, but to the South African taxpayer as a result of criminal activity.”

She added that the arrests were the result of the Sars investigating team focusing “exclusively on income tax fraud, and especially on syndicates of this nature which carry out the fraud on such a large scale”.

Muller said the tax-collecting entity had launched a campaign to educate the public to understand their tax obligations and how to avoid falling prey to fraudsters.

“It’s imperative that taxpayers be careful about who they entrust with their tax details,” she said, also urging taxpayers to visit their nearest Sars offices if they needed any information and advice on completing their tax returns.

Ramaloko said the suspects faced charges of fraud and possibly, racketeering. They would appear in the KaBokweni, Komatipoort, Bushbuckridge and Nelspruit magistrate’s courts soon.

By Lebogang Seale - lebogang.seale@inl.co.za
The Star 06/09/13 Early Edition
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