SOUTH African Revenue Service (Sars) made multiple arrests on Thursday, 12 October in an effort to tackle a coal smuggling syndicate.
According to the revenue service, the smuggling syndicate makes the energy crisis and load shedding worse.
The operation was held alongside the National Joint Operational and Intelligence Structure (NATJOINTS) and Energy Safety and Security Priority Committee in five provinces.
Former Eskom employees were among the arrested coal-smugglers syndicates. The employees facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.
In a statement Sars, which was the lead agency in the search and seizure operation, said information became available regarding a host of tax crimes allegedly committed by members of the coal smuggling syndicate.
The entity stated that these targeted operations also helped to prevent the loss of revenue to the fiscus, which in this case amounted to more than R500 million.
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According to Sars, the alleged coal smugglers and their related entities are active and have a presence in Gauteng, Mpumalanga, KZN, Free State and Limpopo.
“Sars managed to establish links between individuals and related entities and confirmed possible gross contraventions from a tax perspective in terms, 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),” read the statement.
Sars further said that the coal trucks destined for power stations are diverted to designated coal yards where high grade coal is replaced with low grade or sub-standard products.
“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 Eskom power stations, which is a major factor in crippling the power utility’s ability to generate electricity for the South African grid.”
Sars commissioner Edward Kieswetter commended the law enforcement agencies for this massive breakthrough in ongoing investigations.
"It's 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,” said Kieswetter.
He said that 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 willful non-compliance without fear, favour or prejudice,” he said.
