Hawks nab duo for millions in VAT fraud

Hawks spokesperson Captain Lloyd Ramovha said a man and a woman were arrested for allegedly defrauding municipalities of millions of rands.

Johannesburg - Two suspects have been arrested by the Directorate for Priority Crime Investigation (Hawks) for fraud and contravening the Value Added Tax (VAT) Act, police said on Thursday.

Hawks spokesperson Captain Lloyd Ramovha said a man and a woman, aged 42 and 49 respectively, were arrested on Tuesday for allegedly defrauding municipalities of millions of rands. “The arrests followed lengthy internal South African Revenue Service investigations relating to unclaimed Input VAT claims by several Western Cape municipalities, for the period of two years,” said Ramovha.

Ramovha said it is alleged that a tax consultant company under the duo's directorship was contracted by Oudtshoorn, Venterdorp and Plettenberg Bay Municipalities to assist in recovering unclaimed Input Vat for these periods, and in return, the entity was paid lucratively for each successful tax recovery made.

“Investigations laid bare the fact that the said entity was somehow allegedly inflating their VAT assessment figures as it stood to benefit directly,” said Ramovha .

He said claims were somehow allegedly repeatedly submitted even on items already claimed in previous periods or claimed on items which are prohibited by the VAT Act, resulting in the Receiver of Revenue suffering losses to the tune of approximately R16 million. “The suspects' unlawful exploits were brought to a screeching halt by the probe and they are expected to appear in the George Magistrate's Court on October 4, to face charges of fraud and contravening Value Added Tax Act,” said Ramovha.

African News Agency