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Do you have an 'Isak Engelbrecht' issuing false tax invoices in your company's name?

by , 22 October 2015
I've just had an urgent call from Peter Franck, my Editor-in-chief of the Practical VAT Loose Leaf Service, that I have to share. At his most recent meeting at SARS, Peter learnt about a man named Isak Engelbrecht.

SARS caught Isak issuing false tax invoices to his crooked buddies! Isak's friends would claim the input tax and then split it up amongst themselves. But there was no corresponding output tax from Isak's company - because the orders were fake!

Read on to find out what happened to Isak and the consequences you'll face if you have VAT fraud taking place in your company.

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Are there any inaccuracies in your VAT invoices? You may be charged a very high penalty!
 
The truth is brutal! Even if it wasn't you who made the mistake, it may be you who will bear the consequences. If SARS has found inaccuracies, you will be assessed, held liable to penalties and interest and possibly even additional tax! You may even be prosecuted!
 
Here's what you need to make sure your VAT invoices are 100% correct
 
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What happened to Isak Englebrecht?
 
I'm not surprised Isak went straight to jail when he was caught out. But I am troubled by the fact that it wasn't just Isak who had to pay for this VAT fraud.
 
SARS made Isak's boss pay the R1.6 million in VAT Isak had raised in the false tax invoices. And they didn't care that the boss could prove he didn't know about, and wasn't involved in Isak's VAT fraud. SARS still demanded their output tax.
 
Read on for the consequences of VAT evasion.

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Ex-SARS auditor reveals: Five red-flags SARS looks for when doing a VAT audit
 
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The consequences of VAT evasion
 
If you:
  • Issue a fictitious tax invoice;
  • Use, or authorise someone else to use fraud;
  • Create a plot to evade VAT; or
  • Make any false statement to get any refund or exemption from tax, you're committing a criminal offence!
 The Tax Administration Act (TAA) says if you make a false statement as above, you're guilty of an offence (section235(1), TAA).
 
Unless you can prove there's a reasonable possibility you didn't know the statement was false. And you also have to prove you didn't know because you were negligent.
 
Engelbrecht got six years imprisonment (two years suspended) on 157 charges of fraud and three years on one charge of corruption. But his employer didn't face criminal prosecution.
 
Don't let this happen to you! For everything you need to know about VAT compliance, turn to your Practical VAT Loose Leaf Service. Don't have one yet? Simply click here to order with your 30-day money back guarantee.
 
 
 
 


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