The GOOD Party said it welcomed the crackdown by Sars on what is understood to be a sophisticated criminal syndicate of alleged coal-smugglers who have played a major role in exacerbating the energy crisis.
Sars said a massive inter-governmental search and seizure operation across five provinces was carried out yesterday, to break the back of a sophisticated criminal syndicate of alleged coal-smugglers who played a major role in exacerbating the energy crisis and load shedding.
Sars was the lead agency in the search and seizure operation because information became available regarding a host of tax crimes allegedly committed by members of the coal-smuggling syndicate.
The institution said the success of the 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.
“It is due to such hard work, often behind the scenes, that leads to these investigative breakthroughs, and ensures that South Africans can return to a lifestyle without load shedding. These targeted operations also help to prevent the loss of revenue to the fiscus, which in this case amounted to more than R500 million. The alleged coal-smugglers and their related entities are active and have a presence in Gauteng; Mpumalanga, KwaZulu-Natal;,the Free State and Limpopo,” said Sars .
The suspects targeted yesterday include former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.
The institution said it managed to establish links between individuals and related entities and confirmed possible gross contraventions from a tax perspective in terms of 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).
“The sophisticated network of coal-smugglers is suspected to consist of local and foreign nationals. Coal trucks destined for power stations are diverted to designated coal yards where high-grade coal is replaced with low-grade or sub-standard product. 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” said the institution.
Sars commissioner Edward Kieswetter commended the country’s law enforcement agencies for this massive breakthrough in ongoing investigations.
“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,” said Kieswetter.
The institution is encouraged that the message is clear and unequivocal to all those involved in organised crime that they will be hunted down and brought to book.
GOOD secretary-general and MP Brett Herron said while this development only addressed one of the multiple challenges behind the power utility’s inability to keep the lights on, it is encouraging and essential to ending the crisis.
Herron said when high-grade coal is replaced with low-grade supply, it severely damages the infrastructure at power stations, breaking down the ability to generate electricity.
“The fact that action is being taken to address the role of crime and corruption does provide us with some hope that the entrenched greed in Eskom and the associated power cuts will eventually end.
“For far too long load-shedding has crippled livelihoods and businesses in South Africa, while the corrupt happily continued to strip Eskom bare,” said Herron.
He said those responsible for dealing with organised crime are doing their part, Eskom management and government leaders need to remain focused on concrete steps toward sustainable solutions.
ntombi.nkosi@inl.co.za