Johannesburg - A Johannesburg businessman, Anwar Gaffor, was sentenced to 45 years in jail on three counts of fraud in the Johannesburg Specialised Commercial Crimes Court sitting in Palm Ridge Magistrate’s Court.
Gaffor, 41, was, however, ordered to serve 15 effective jail sentences.
According to the charge sheet, Gaffor and his company, Ceiling and Partition Installers (PTY) LTD were charged with three counts of fraud.
During the period 09 September 2019, the accused submitted fictitious Value Added Tax (VAT) 201 returns to the South African Revenue Service (SARS). He unduly benefited from VAT refunds worth over R2.9 million.
According to South African Revenue Services, any person who carries on any enterprise is compelled under certain conditions to register for VAT with SARS. Once registered, the entity is then referred to as a VAT Vendor, and as such VAT must be collected from suppliers of goods and services.
This is referred to as Output Tax. The VAT Vendor is also able to deduct VAT on a variety of expenses, including capital and operating costs, as long as they are necessary to advance the business and are permitted under the VAT Act. This is referred to as Input Tax.
Every second month the Vendor must submit to the Commissioner VAT returns referred to as VAT 201, accounting for both Output and Input Tax. SARS relies on the integrity and honesty of each VAT Vendor when it comes to administering the amount payable to SARS or refundable to VAT Vendor.
However, the court found that Gaffor used false or fictitious tax invoices that were purported to be from different entities, to substantiate or support the claims for VAT refunds.
On Thursday, the National Prosecuting Authority and SARS through NPA regional spokesperson Phindi Mjonondwane and Sars spokesperson Siphithi Sibeko commended Advocate Lebohang Jobo and Investigating Officer Constable Phesheni for ensuring that the accused faced the might of the law for abusing the confidence SARS entrusted in him as a VAT Vendor and hopes that the sentence given would dissuade people from evading tax liability through criminal conduct.
“SARS Commissioner Mr. Edward Kieswetter expressed his appreciation to NPA and the Criminal Investigation team within SARS for their cooperation that led to this excellent outcome. He warned taxpayers who willfully transact with the organisation with the view to defraud SARS that the organisation will relentlessly pursue those with criminal intent,” Mjonondwane and Sibeko said.