Online Reporter
The South African economy loses billions of rands to tax evasion and illicit financial flows annually, but the South African Revenue Service (Sars) continues to wage its battle against tax fraud.
In 2020, Business Leadership South Africa estimated that the country lost around R250 million daily as a direct result of illicit trade.
In 2022, the Organisation for Economic Co-operation and Development estimated that South Africa was losing US$3,5 billion to US$5 billion (R62 billion to R88,8 billion) per year, or more than 1 percent of its GDP, to illicit financial flows.
In a statement on its website at the end of last year, Sars said it was determined to act on tax crime in SA and it wanted those committing these crimes to know that they are firmly in its sights.
Sars notes that the impact of activities within the illicit economy is enormous and poses a real threat to the country. It quotes the United Nations, which stated that “money flowing to organised crime outstripped all the money that the developing countries could devote to long-term development”.
A large number of illicit cigarettes are consumed in South Africa every year. “That means we lose excise revenue every year. That sort of revenue would build quite a few more schools, roads and houses, which we need,” says Sars.
Moneyweb recently reported that cheap cigarettes, sometimes selling for around R5 per packet of 20 in the market, translate into an estimated R28 billion loss to the fiscus annually. Or put differently, around R100 million each working day.
One recent success for Sars was a high court confirmation of a preservation order against several entities associated with Amalgamated Tobacco Manufacturing.
In June this year, the Durban High Court issued its judgment in an application by Sars for the confirmation of a preservation order against two entities, Plus0 and Dodo, after a provisional preservation order was granted against 20 respondents in February this year. — Moneyweb
