Former Eskom employees among those targeted as Sars raids coal smuggling syndicate

The SA Revenue Service (Sars) led a search and seizure operation across five provinces on Thursday in an attempt to bring down a coal-smuggling syndicate.

The operation was launched after Sars received information of tax-related crimes in Gauteng, Mpumalanga, KwaZulu-Natal, the Free State and Limpopo.

Diversion of coal

Sars said the suspects involved in the diversion of high-grade coal, include former Eskom employees.

It added that the network of coal-smugglers is suspected to be made up of local and foreign nationals.

“Coal trucks destined for power stations are diverted to designated coal yards where high-grade coal is replaced with low-grade or sub-standard product. 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,” said Sars.

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Low-grade coal has been blamed for damaging infrastructure at some of Eskom’s power stations, leading to more severe bouts of load shedding across the country.

Sars also said the coal-smuggling syndicates have led to South Africa losing more than R500 million.

Tax contraventions

The tax authority said it had established links between individuals and related entities and confirmed contraventions of tax laws, including the non-registration for income tax, failure to submit tax returns, the under-declaration of income, claiming undue VAT refunds, and making false submissions.

No arrests have been made at this stage.

Sars commissioner Edward Kieswetter called the operation a “massive breakthrough”.

“It is because of such naked greed that the country has experienced unprecedented load shedding, which harms business, undermines foreign direct investment and leads to job losses – all of which negatively affect revenue collection,” he said.

“For its part, Sars will continue to pursue taxpayers involved in intentional and willful non-compliance – without fear, favour or prejudice.”

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