The Johannesburg Specialised Commercial Crimes Court, sitting in Palm Ridge, has sentenced 41-year-old, Anwar Gaffor to 45 years imprisonment after convicting him on three counts of fraud.
Spokesperson for the National Prosecuting Authority (NPA) in Gauteng, Phindi Mjonondwane said the court ordered that sentences imposed on counts two and three run concurrently with the sentence on count one, resulting in an effective imprisonment term of 15 years.
“Gaffor and his company, Ceiling and Partitioner Installers (PTY) Limited were charged with three counts of fraud. During the period (from) September 9, 2019, the accused submitted fictitious Value Added Tax (VAT) 201 returns to the South African Revenue Service (Sars). He unduly benefited from VAT refunds worth over R2.9 million,” Mjonondwane said.
“Any person who carries on any enterprise is compelled under certain conditions to register for VAT with Sars. Once registered, the entity is then referred to as a VAT vendor, and as such, VAT must be collected from suppliers of goods and services,” she said.
This, the NPA explained, is what is referred to as output tax.
A VAT vendor is able to deduct the tax on a variety of expenses, including capital and operating costs, as long as they are necessary to advance the business and are permitted under the VAT Act. This is referred to as input tax.
“Every second month, the Vendor must submit to the (Sars) commissioner for VAT returns referred to as VAT 201, accounting for both output and input tax. Sars relies on the integrity and honesty of each VAT vendor when it comes to administering the amount payable to Sars or refundable to the VAT Vendor,” said Mjonondwane.
According to the NPA, Gaffor used false or fictitious tax invoices that were purported to be from different entities, to substantiate or support the claims for VAT refunds from Sars.
The NPA has commended the prosecutor, advocate Lebohang Jobo and the investigating officer, constable Phesheni “for ensuring that the accused (Gaffor) faces the might of the law for abusing the confidence Sars entrusted in him as a VAT vendor, and hopes that the sentence given will dissuade people from evading tax liability through criminal conduct”.
On the other hand, Sars Commissioner Edward Kieswetter has expressed appreciation to the NPA and the investigation team within Sars for their cooperation which led to Gaffor’s conviction and sentence.
Kieswetter warned taxpayers who wilfully transact with Sars with the intention to defraud the tax collector, that the organisation will “relentlessly” pursue those with criminal intent.
IOL