Durban - Organised crime syndicates were helping businesses to dodge paying tax and to commit customs fraud, the South African Revenue Service (Sars) has alleged.
Sars said it had identified “extensive non-compliance” within the fast-moving consumer goods sector and investigations had led them to believe that “organised syndicates with sophisticated organisational structures” were involved in robbing the taxman.
Luther Lebelo, Sars spokesman, said they had identified various schemes designed to avoid the detection of significant volumes of cash transactions.
“One such mechanism is the so-called “Ooplang” transactions.
The term “Ooplang” also means: “The practice of keeping a portion of VAT, collected on behalf of the taxman, instead of declaring the full amount, then hiding it from the government.”
“Sars has further noted, with concern, the prevalence of various schemes whereby the VAT system is manipulated by creating apparent legitimacy, but actually facilitating the siphoning of VAT money from the system,” he said.
Some of these identified schemes included:
- “Ghost Exports” which involved zero-rating supplies for VAT purposes on the strength of exports, whereas these supplies were not exported.
- Non-recording of the sale of cellphone air time.
- Manipulation of loan accounts, claiming fraudulent invoices for VAT and Income Tax purposes.
- Utilisation of intermediary companies to create invoices.
- Use of computer programs to suppress sales but retaining a seemingly legitimate business profit ratio. In many instances money laundering was an element of these schemes.
Daily News