SARS clamps down on illegal trade

The SA Revenue Service (SARS) is stepping up its actions against illegal trade. While much of this has involved illegal cigarettes and narcotics, the poultry industry has welcomed action against illegal trade in chickens, and believes more is to come.

SARS is part of a task team formed in terms of the 2019 poultry master plan to “act effectively” against illegal and fraudulent trade in chicken imports which can be aimed at evading or lessening tariff and Value Added Tax payments.

The master plan identifies three specific areas:

1. Incorrect classification of imports. Action here would identify and prevent chicken imports being classified under an incorrect tariff heading, so that chicken products which attract high import tariffs or duties are mis-declared as products that have low duties or are duty-free.

2. Under-declaration of imports. This would happen when the declared value of imports is lowered in order to pay lower import duties.

3. Round-tripping. This occurs when imports enter the country free of duties and taxes because they are bound for re-export to other countries. In fact the consignments stay in South Africa and the fiscus loses out on duties and VAT payments.

Recently arrests were made and a large consignment of chicken was confiscated. The case is due back in court on 12 April and the trial will reveal under which of these headings the accused have been charged.

SARS Commissioner Edward Kieswetter says that, while SARS will help traders to comply with their legal tax obligations, it is building its capacity make it “hard and costly” for traders who choose to be non-compliant.

“This is a warning that we will leave no stone unturned in ensuring that those involved in criminal behaviour are dealt with harshly,” he is quoted as saying. 

FairPlay will be monitoring progress in prosecuting any tax fraud identified in terms of the poultry master plan.

Image: Edward Kieswetter, Commissioner of the South African Revenue Service. Courtesy: GCIS/ Flickr