A multidisciplinary operation involving the SA Revenue Service (SARS), Hawks and various law-enforcement units on Thursday pounced on a coal-smuggling syndicate.
The syndicate is allegedly one of the reasons the country is experiencing loadshedding and energy crisis.
In a statement, SARS said the alleged coal smugglers are both foreign and South African citizens, and have been linked to entities in five provinces – Gauteng, Mpumalanga, KwaZulu-Natal, Free State and Limpopo.
The suspects would allegedly reroute the coal trucks destined for power stations and redirect them to designated coal yards where high-grade coal would be replaced with low grade.
SARS commissioner Edward Kieswetter said the taxman managed to link the entities with people involved and confirmed possible gross contraventions from a tax perspective.
The contraventions include non-registration for income tax, value-added tax (VAT) and/or pay as you earn, failure to submit tax returns, under-declaration of income, claiming undue VAT refunds, and making fraudulent submissions.
Kieswetter said such operations help prevent the loss of revenue to the fiscus, which in this case amounted to more than R500-million.
“The sophisticated network of coal smugglers is suspected to consist of local and foreign nationals,” said SARS in a statement.
“The high-grade coal is then exported or sold to willing buyers. The low-grade coal is often blended with scrap or other materials and then delivered to power stations.”
The low-grade coal damages infrastructure at Eskom power stations, a major factor in crippling the power utility’s ability to generate electricity for the grid.
Said SARS: “The operation to bring to book the criminals that have caused economic hardship and personal hardship to all citizens is due to inter-governmental co-operation.
“It is due to such hard work, often behind the scenes, that leads to these investigative breakthroughs and ensures that South Africans can return to a [normal] lifestyle without loadshedding.
“These targeted operations also help to prevent the loss of revenue to the fiscus, which in this case amounted to more than R500-million.”
Kieswetter said it is because of greed that the country has experienced unprecedented loadshedding, which harms business, undermines foreign direct investment, and leads to job losses, all of which negatively affect revenue collection.
“All law-enforcement agencies must continue their aggressive fight against criminality, each according to its mandate.
“For its part, SARS will continue to pursue taxpayers involved in intentional and willful non-compliance, without fear, favour or prejudice.”
The suspects’ targets included former Eskom employees who facilitated procurement fraud, as well as other individuals involved in the diversion of high-grade coal.
