SARS busting crime syndicates

There is a proliferation of tax and economic crime in South Africa, but the South African Revenue Service (SARS) is committed to breaking the back of criminal syndicates.

Speaking on The Money Show, SARS commissioner Edward Kieswetter said that he often gets the impression that criminal syndicates are better resourced and more organised than SARS can be.

However, SARS is building back capacity to take down criminal syndicates involved in the illicit tobacco trade, the fuel industry, gold refining, clothing and textiles, and leather goods.

Under the tenure of Kieswetter as commissioner, SARS has increased tax compliance, which has raised gross tax revenue over R2 trillion for the first time.

SARS has collected a net revenue of R1.687 trillion for the financial year ending on 31 March 2023. It represents annual growth of 7.86% or R123 billion.

Kieswetter said that no one thing contributed to this feat. “How did we do it? I always say it is not one big thing – it is getting many little things right.”

One thing SARS is starting to get right is clamping down on illicit activities.

Regarding illicit economy investigations, Kieswetter said SARS conducted 334 preliminary cases, profiled another 212, and 215 have been completed.

As a result, SARS raised assessments of R3.9 billion, collected R5.1 billion, and froze R1 billion of assets.

“We are slowly but surely making inroads,” said Kieswetter, stressing that SARS works closely with the National Prosecuting Authority and the Hawks.

Alcohol and cigarettes

Kieswetter explained what SARS has done to clamp down on the illicit tobacco industry as an example of SARS’s efforts to curb financial crime.

The total shutdown of the alcohol and cigarette supply chain through the pandemic sadly “gave rise to a proliferation and an embedding of syndicates in our value system”, said Kieswetter.

These syndicates have continued their operations beyond the pandemic as smokers and drinkers maintain their demand for the products. These products are offered at a significantly lower price as no tax is paid.

But SARS is disrupting these syndicates.

A team of nine people took three years to sift through 16 terabytes of data to find and connect dots in syndicates involved with the illicit tobacco trade.

Kieswetter said syndicates are still embedded in the supply chains, but SARS has begun unwinding these syndicates. 

In February this year, SARS announced that it was able to intercept truckloads of illegal cigarettes.

Working together with the South African Police Service and the South African Defence Force, they were able to achieve the following concerning stopping cross-border cigarette smuggling:

• 1,185 master cases of illicit cigarettes with brands of Remington Gold, Chelsea and Royal Express, worth millions, were detained.
• Four people were arrested, and criminal cases were opened concerning dealing in the smuggling of illicit cigarettes.
• Four trucks, one bakkie, and one tractor with a trailer used to carry the illicit cigarettes were detained worth millions in estimated value.