SCA upholds ruling on business owners charged with tax evasion

South African Revenue Service (Sars) Commissioner Edward Kieswetter is pleased with the Supreme Court of Appeal’s (SCA) decision to uphold a ruling on a tax evasion case.

This ruling supports Sars’s claim that the business in question failed to properly submit financial data, making it eligible for criminal charges.

The case began when Sars conducted an audit of the business. The audit showed the business had deliberately submitted tax returns with zeros for both Value Added Tax (VAT) and Corporate Income Tax (CIT), even though SSars claimed that they were making money and incurring expenses.

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During the investigation, Sars found that the tax information submitted by the business owners was false. Consequently, Sars imposed tax administrative penalties.

Intentional tax evasion

One of the business owners accepted the penalties but disagreed with the idea of facing criminal charges as well as the tax administrative penalties, arguing that this amounted to being charged twice for the same offense.

The case was then dragged to court where it was found that the business owners had indeed intentionally evaded tax submissions, and convicted them accordingly.

The case was thereby taken to the SCA.  

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However, the SCA recently decided there was no chance of success for the appeal made by the business owner.

Abuse the system

Kieswetter praised the court’s decision, stating, “Many taxpayers try to abuse the system by providing false or zero returns, hiding their actual business activities. The court’s decision confirms that this is not just a minor issue; it’s a crime.”

He said this ruling showed the importance of thorough investigations into tax evasion and the proper application of penalties for violations. He said Sars would continue to pursue those who deliberately do not comply with tax laws.