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SARS warns against defrauding the entity

The South African Revenue Service (SARS) has warned officials and the public against defrauding the entity as action will be taken against those who engage in criminality.

“SARS is living up to its strategic objective of making it hard and costly for those that chose to engage in criminality when dealing with SARS,” SARS Commissioner Edward Kieswetter said on Wednesday.

His remarks come after a clearing agent and his co-accused were charged with fraud and various contraventions of the Customs and Excise Act.

Jayson Perumal (43) of Dynamic Freight and Reshlan Pillay (38) recently appeared in the Durban Commercial Crimes Court for a customs and excise related fraud matter. The matter was postponed to 20 October 2022 and both accused are out on bail.

“SARS wants to warn clearing agents that they will face the full might of the law when arrested.  At the same time, SARS also wishes to warn the public, especially importers, to be vigilant when contracting with clearing agents.

“They need to be aware of the correct duties and VAT that need to be paid, and ensure that those amounts have actually been paid to SARS. In terms of the Customs and Excise Act, the importer is ultimately liable for the duties and VAT payable to SARS,” the revenue service said.

It is alleged that Pillay, director of Potenza Capital, and a clearing agent, processed customs entries while working with Perumal of Dynamic Freight, who was acting on behalf of various importers.

Potenza Capital is alleged to have submitted false documents to SARS, where the values of the goods, the goods themselves and the importers details were falsified, resulting in minimal duties and Value-Added Tax (VAT) paid over to SARS.

“Importers should demand proof of their payments to SARS, relating to any of their imports, from clearing agents. SARS has established that some clearing agents wilfully under declare the value of goods by as much as 90%, through falsifying importation documents.

“However, they are alleged to claim the correct duties and VAT from their clients, whilst paying SARS the minimum duties and VAT. The clearing agents then allegedly pocket the difference, thereby enabling the low rates for their services, whilst defrauding both SARS and the importer,” SARS said.

SARS said the importer is prejudiced twice if SARS audits these transactions and levy the correct amount of VAT and duties which is payable by the importer.

SARS has expressed concern about the scope of this scam, as investigations into similar schemes to the value of millions of rands are currently being investigated in Gauteng and in the Western Cape.

“It is critically important that all role players act prudently and honestly when dealing with SARS,” Kieswetter said. –

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