South Africans are handing their tax accounts over to people who put them at risk of losing millions and going to jail

South African taxpayers who entrust their tax affairs to the wrong practitioner could face substantial financial losses, additional tax assessments and even criminal prosecution.

This is according to Tax Consulting SA Partner and Head of Strategic Engagement and Compliance, Jashwin Baijoo.

He warned that fraudulent tax returns, fictitious refund claims and forged documents can turn routine tax engagements into serious legal problems.

Many taxpayers appoint a practitioner for convenience and provide them with financial documents and access to their SARS eFiling profiles. However, they may have little oversight of what is submitted in their names.

The risk is that the person appointed to ensure compliance may instead expose the taxpayer to financial and criminal consequences.

The tax fraud case involving Eastern Cape tax practitioner Francis Muleso showed the potential scale of the problem.

Muleso was arrested by the Hawks in connection with alleged tax fraud involving financial prejudice to SARS of more than R9.6 million.

The allegations relate to returns submitted between March 2016 and March 2020. Investigators reportedly found that a close corporation had submitted nil income tax returns despite allegedly generating taxable income.

An examination of its banking records and tax declarations reportedly revealed substantial discrepancies in its VAT affairs.

These included the understatement of output VAT by more than R2.7 million and the overstatement of input VAT claims by more than R6.1 million.

Muleso was granted bail of R50,000, and the matter was postponed to 18 January 2027. The allegations have not been proven in court.

Baijoo explained that the case shows how tax returns can become evidence in criminal investigations.

As such, taxpayers cannot assume that appointing an intermediary automatically removes their responsibility for what is submitted.

The circumstances of each case matter, including who authorised the returns, what the taxpayer knew and whether criminal intent can be established.

The R9.6 million tax fraud case

The conviction of former SARS employee and registered tax practitioner Michael Benson shows that professional registration does not guarantee ethical conduct, Baijoo noted.

In November 2025, the National Prosecuting Authority announced that Benson had received an effective six-year direct imprisonment sentence following convictions for fraud, forgery, uttering and failing to keep proper records.

According to the NPA, Benson submitted 11 fraudulent VAT returns claiming approximately R1.7 million in refunds. SARS paid approximately R1.58 million into his bank account.

When SARS requested supporting documents, Benson produced further documents that were found to be forged. These included purported tax invoices, bank statements and municipal contracts.

A separate case involving television producer and businessman Dumakude Mayivuke Ndlovu also highlights the risks associated with tax practitioners.

In October 2024, Ndlovu appeared in court alongside two co-accused in a tax fraud matter involving approximately R26 million in personal and company income tax.

The co-accused included Rodney Mutsharini, a registered tax practitioner who assisted with personal income tax, and Maxwell Mloyi, an unregistered practitioner who assisted with company income tax.

The three were charged following their arrests on 30 September 2024. Their involvement in the matter does not, by itself, establish that the taxpayers or practitioners are guilty.

SARS fraud has severe consequences

Baioo said so-called ghost practitioners may falsely claim professional credentials, operate outside the appropriate regulatory framework or exploit taxpayers’ limited understanding of tax legislation.

Some promise unusually large refunds, guaranteed tax reductions or supposed insider connections at SARS.

Others request unrestricted access to eFiling profiles while providing little information about the returns they submit.

The problems may only emerge when SARS rejects a refund, identifies discrepancies, issues an additional assessment or launches an investigation.

By then, the practitioner may have disappeared, payments may have been diverted, and the taxpayer may be left trying to establish what was submitted in their name.

The risks include false returns involving omitted income or unsupported deductions, fraudulent VAT and income tax refund claims, and payments intended for SARS being diverted into another person’s account.

Taxpayers may also face unauthorised changes to their eFiling profiles or missed deadlines for objections and appeals.

Not every unregistered individual is necessarily fraudulent, and registration alone does not guarantee competence or integrity.

Baijoo advised taxpayers to verify a practitioner’s credentials and to understand exactly what services the practitioner provides.

An irregular return may initially pass through the system without immediate intervention. However, that does not mean it has escaped detection.

SARS can identify discrepancies through audits, verification procedures, banking information and other available data. Suspected criminal conduct may then be referred to law enforcement.

Depending on the circumstances, taxpayers may face additional assessments where returns or claims are incorrect.

Understatement penalties may also apply under the Tax Administration Act, depending on the nature and severity of the taxpayer’s behaviour.

Outstanding liabilities can attract interest and become subject to lawful recovery action.

Where the evidence supports criminal charges, taxpayers and practitioners may face prosecution and, if convicted, imprisonment or other legally prescribed sanctions.

Not every mistake constitutes fraud, and a disputed assessment does not automatically amount to criminal wrongdoing.

However, taxpayers should not mistake the absence of immediate SARS intervention for proof that an arrangement is safe.

Complex SARS disputes may involve tax legislation, procedural requirements and legal remedies that go beyond routine tax services.

While tax practitioners and accountants provide valuable support, allegations of fraud, criminal investigations and contentious assessments may require specialist legal expertise, Baijoo cautioned.

A tax attorney can assess a dispute, advise on taxpayers’ rights and challenge assessments where justified.

Communications with an attorney for legal advice may also attract legal professional privilege, provided the relevant requirements are met. This protection is not automatic and does not cover fraudulent conduct.

Baijoo stressed that taxpayers should verify their representatives’ credentials, review returns submitted in their names and maintain oversight of their SARS affairs.