South African Breweries (SAB) has found itself entangled in a multi-million-rand tax evasion scandal allegedly committed by one of its service providers.
According to Sars, SAB imported Corona light beer from Mexico from August 2018 to November 2019, using the services of Ocean Light Shipping.
Ocean Light is a clearing agent (an agent who completes all port and customs formalities on behalf of the consignee or receiver of cargo at the destination port) established in terms of the tax laws of the country.
Sars found that the imported liquor was cleared in the Port of Durban in 139 import transactions. However, the tax man did not get what was due to it after the liquor was fraudulently cleared by Ocean Light as traditional African beer.
Traditional African beer is a product attracting less or nil import duties compared to Corona beer. The receiver of revenue said the fraud saw it lose out on import duties and VAT amounting to R139-million.
It was SAB that discovered and reported the fraud.
This is where the tax dispute between Sars and SAB ensued. SAB contended that Ocean Light was the agent of the tax man at that Sars should hold Ocean Light liable for taxes because SAB had paid all amounts due to Sars, to Ocean Light.
Sars argued it is SAB that is liable to pay the tax, and the South Gauteng High Court this week agreed with the tax man. “The tax amount which is a subject matter is not a form of punishment but fulfilment of payment obligation on the applicant’s part…” the judgment reads.
SAB spokesperson Kanyisa Ndyondya said the company had cut ties with Ocean Light and was taking legal advice.
Attempts to get hold of Ocean proved futile as calls went unanswered.
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