Sars commissioner Edward Kieswetter has commended the country’s law enforcement agencies for the massive breakthrough in Eskom coal syndicates and smugglers following an inter-governmental search and seizure operation carried on Thursday.
On Thursday, the South African Revenue Service (Sars) confirmed that a massive inter-governmental search and seizure operation across five provinces has led to multiple arrests of syndicates linked to coal smugglers who have contributed to the energy crisis in the country.
In a statement, Sars said the operation was carried out on on Thursday morning with the arrests of syndicates and coal-smugglers whose activities and entities were based in Gauteng; Mpumalanga; KwaZulu-Natal; the Free State and Limpopo provinces.
Sars said these syndicates had committed a range of tax crimes which enabled them to eventually track them down.
“This success of today’s operation is due to exceptional inter-governmental co-operation and information-sharing under the auspices of the NATJOINTS Energy Safety and Security Priority Committee tasked with unmasking and bringing to book the criminals that have caused economic hardship and personal hardship to all citizens of the country,” Sars said.
The revenue collector said, the operation has helped prevent the loss of revenue to the fiscus, which is estimated at more than R500 million.
The suspects targeted today include former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.
The revenue collector said it was able to link these smugglers through non-registration for Income Tax, VAT and/or PAYE, failure to submit tax returns, under-declaration of income, claiming undue VAT refunds and making false submissions (Fraud).
Sars said the sophisticated network of coal-smugglers is suspected to consist of local and foreign nationals who hijack and divert coal trucks destined for power stations and load them with low grade coal in exchange for high grade coal.
“The high-grade coal is then exported or sold to willing buyers. The low-grade coal is often blended with scrap or other materials and then delivered to power stations.
“The low-grade coal damages the infrastructure at the Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid,” SARS says.
Kieswetter said greed was responsible for the rise in coal syndicates who have contributed to the country’s ongoing energy crisis.
“It is because of such naked greed that the country has experienced unprecedented load shedding, which harms business, undermines foreign direct investment and leads to job losses – all of which negatively affect revenue collection”.
“All law enforcement agencies must continue their aggressive fight against criminality, each according to its mandate. For its part, Sars will continue to pursue taxpayers involved in intentional and wilful non-compliance – without fear, favour or prejudice,” Kieswetter said.
Kieswetter said Sars was encouraged that the message was clear and unequivocal to all those involved in organised crime – ‘you will be hunted down and brought to book’.