The South African Revenue Service (SARS) led a massive inter-governmental search and seizure operation to break a syndicate of coal smugglers who greatly worsened load shedding.
SARS was the lead agency after tax-related crimes from the members of the coal-smuggling syndicate were flagged.
“This success of today’s operation is due to exceptional inter-governmental co-operation and information-sharing under the auspices of the NATJOINTS Energy Safety & Security Priority Committee tasked with unmasking and bringing to book the criminals that have caused economic hardship and personal hardship to all citizens of the country,” SARS said.
“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 lifestyle without load shedding. These targeted operations also help prevent revenue loss to the fiscus, which amounted to more than R500 million.”
The alleged coal smugglers were in Gauteng, Mpumalanga, KwaZulu-Natal, Limpopo and the Free State.
Some of the suspects included former Eskom employees who facilitated procurement fraud.
SARS was able to show a connection between individuals and related entities regarding possible gross contravention from a tax perspective in terms of failure to submit tax returns, under-declaration of income, claiming undie VAT refunds and more.
“The sophisticated network of coal smugglers is suspected to consist 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,” SARS said.
“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.”
This low-grade coal severely damages the infrastructure at Eskom’s power stations, limiting its ability to generate electricity.
“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,” SARS Commissioner Edward Kieswetter said.
“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 wilful non-compliance – without fear, favour or prejudice.”
SARS warned that those involved in organised crime will be “hunted down and brought to book.“