The taxman has had enough of corrupt customs agents helping companies and individuals dodge the payment of import and export duties.
South African Revenue Service (Sars) Commissioner Pravin Gordhan will be calling a meeting with representatives of customs agents. These are individuals and companies accredited to collect import and export duties on behalf of Sars.
Gordhan will tell the meeting that ”the game is up”, sources said. The Mail & Guardian was informed that criminal arrests would follow, some as soon as next week.
Sars officials said South Africa last year had a ”tax gap” — money owed to the fiscus but not paid to the state — of about R30-billion.
Fraud perpetrated by customs agents was contributing ”substantially” to this shortfall. South Africa was losing billions of rands as a result of the under-declaring of imported goods and various scams where companies took advantage of laws and agreements between countries.
Up to 80% of all import and export transactions are carried out through customs agents, independent individuals or undertakings that earn a commission from these transactions. There are about 3 000 agents.
”This is a very complex process,” one revenue service official explained. ”If, for example, you import a salted frozen chicken, you pay a different tariff to what is due on a spiced chicken.
”If you are overseas and want to send a gift home, or have bought a car and want to repatriate it, a different tariff applies to when the goods are imported for commercial purposes.”
In some instances, businesses pretended they were exporting their wares, winning exemption from paying the 14% value added tax. They then sold goods into the local market at a reduced price.
The Sars source said one of the agents’ favourite ploys was to ”forget” to add a required zero to a declared amount. ”What is strange is that the mistakes are never in favour of the revenue service.”
Companies or individuals also abused trade agreements between South Africa and other countries entitling goods from those countries to enter South Africa duty-free.
Goods were exported to a country that did not have a free trade agreement with South Africa and then into one where such an agreement existed. The items would then be relabelled as having been manufactured in the second country and exported to South Africa.
Sars spokesperson Sechaba Nkosi declined to comment, saying that in terms of the Tax Act, it was illegal to comment on any matter affecting the taxation of individuals or companies.
Industry sources contacted by the M&G declined to comment before next week’s meeting took place.