State capture culprits can expect Sars visit

27 October 2019 - 00:11 By HILARY JOFFE

The South African Revenue Service (Sars) is going after those implicated in state capture, setting up a dedicated team to probe the tax affairs of some of those named at the Zondo and Mpati inquiries. Sars commissioner Edward Kieswetter said this week the revenue service was already pursuing more than 30 cases that have emerged from the inquiries, and had referred one matter, related to four entities, to the National Prosecuting Authority for prosecution. Confidentiality requirements prevent any taxpayers being named but Sars is taking advantage of the bar to going after tax fraud being set relatively low, opening the way for some of those implicated in state capture and corruption to be prosecuted for tax-related crimes even if more complex corruption cases take longer. Kieswetter, who was speaking at the relaunch of the Sars large business centre (LBC) in Midrand, emphasised that the tax authority was rebuilding its operating model based on the assumption that most taxpayers are honest and want to comply with their obligations - but said it would be fierce in pursuing those who did not. Some examples of those the revenue service will be targeting are six shelf-company operators that are creating 400 new shelf companies a week to commit VAT refund fraud, as well as a proliferation of "round-tripping" across borders. Sars is involved in the criminal prosecution of two large companies for this, Kieswetter said. The LBC, whose model is in line with international best practice, was dismantled under former commissioner Tom Moyane in 2015. The Nugent commission of inquiry found Moyane made changes that undermined Sars's integrity and capability.The LBC, a "one-stop shop" for large corporate taxpayers and high net worth individuals, is responsible for more than R460bn a year in tax collections - about one-third of the total tax SA collects across all the tax types (including corporate and personal income tax, value added tax, fuel tax and PAYE).It looks after the tax affairs of more than 10,000 large corporations, including all JSE-listed companies and multinationals as well as any company with turnover of more than R1bn, and it services about 4,000 ultra high net worth individual taxpayers at present, though there are plans to expand the definition and grow this area of the LBC's service.Kieswetter, who was the founding general manager of the centre when it was set up in 2004, said it should ideally have about 600 staff, of whom 75%-80% should be technical professionals, and it was looking to build towards this. Its staff complement now is about 300.Sars has lost about 3,000 people since Moyane was appointed in 2014, but is now looking to bring back some of those who left and to hire in areas such as data and behavioural analysis, as well as audit and technical. "We will be meritocratic snobs; we want to hire the best people," Kieswetter said, adding that the Sars turnaround would take at least five years.

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