Durban - A former property developer from Newcastle has pleaded guilty to Value Added Tax evasion amounting to nearly R800 000, and is to repay the SA Receiver of Revenue R25 000 monthly.
During sentencing on Friday, Durban Regional Court magistrate Fariedha Mohamed described this crime as a “widespread and prevalent offence”.
Charges were provisionally withdrawn against Namichand Maharaj’s three close corporations that had allegedly fraudulently claimed refunds totalling more than R5 million from Sars.
The 59-year-old told the court through his lawyer, senior advocate Christo van Schalkwyk, who was instructed by attorney Raneshan Naidoo, that his bookkeeper had incorrectly calculated and submitted these claims for the period 2008 and 2009.
Maharaj, who was sequestrated in November, said he was accepting responsibility as his bookkeeper had since died, and that he had signed these VAT forms and was “ultimately responsible for the accuracy of the VAT returns and legitimacy of claims”.
According to his written plea, he was the sole owner of a business called Casa Grande, and he was a property developer with the purpose of developing property in Amiel Park, Newcastle.
He was registered as a VAT vendor and his day-to-day accounting and all his tax matters, including VAT, on his behalf, was dealt with by his bookkeeper.
Initially, Maharaj and his three companies – Mahason Developers, Shaka Maize Milling and Mahason Investments – were charged with 28 counts of fraud totalling just over R5.2m, or alternatively, VAT evasion.
On Friday, the State told the court it was provisionally withdrawing the charges against these companies and submitted an amended charge sheet, with only Maharaj listed as an accused.
He was then charged with three counts of VAT evasion, totalling about R744 000.
Extensive
Van Schalkwyk said the parties had been in extensive discussions, which led to the guilty plea.
Maharaj said he was registered, in his personal capacity, as a VAT vendor and all his day-to-day accounting and tax matters were dealt with by his bookkeeper. He had signed all the VAT forms his bookkeeper presented to him.
He said the returns were completed by his bookkeeper ,who calculated the refunds and presented him with the forms to sign. He did so and these forms were submitted to Sars.
He admitted to the court that he ought to have checked the contents and calculated the values, and that he was negligent in his duties as a VAT vendor.
He also admitted he was not entitled to the refunds of about R744 000 paid to him by Sars.
The offence was discovered during a Sars audit which revealed that his three companies were allegedly trading at a loss and most of its income, according to the bank statements, were VAT refunds.
The audit also apparently found fraudulent invoices, quotations and invoices from non-registered VAT vendors were used to claim VAT from Sars.
This, therefore, the State had initially claimed, had resulted in the Sars commissioner suffering an actual prejudice of just over R5.2m.
Maharaj said he had already paid back R100 000 to Sars.
The former property developer is now employed at his son’s wholesale pharmacy as an administrator.
Magistrate Mohamed said VAT evasion was a widespread and prevalent offence and therefore the court looked for a deterrent sentence.
She sentenced him to five years in jail, suspended for five years and he was ordered to repay Sars the outstanding R644 000 by paying R25 000 monthly for the next two years.
Daily News