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12 years imprisonment for VAT fraudster

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A Cape Town man will serve 12 years effective imprisonment for large-scale Value Added Tax (VAT) fraud worth R15 million, said the South African Revenue Service (SARS).

Johannes Tobias Wessels from Kraaifontein was sentenced to 12 years imprisonment for fraud in the Wynberg Magistrate Court on Monday.

“Wessels fabricated invoices from five of his businesses to claim fraudulent VAT refunds in excess of R15 million from SARS over a period of seven years,” said the revenue service on Wednesday.

Wessels pleaded guilty to 403 charges of fraud and 11 charges of contraventions of the Income Tax Act in terms of a plea and sentence agreement with the State.

The contraventions of the Tax Act comprised six counts for the non-submission of income tax returns and five counts for failure to keep proper books of accounts. He was sentenced to 15 years imprisonment, with three years being conditionally suspended. This included 18-months imprisonment for failure to submit income tax returns.

“The VAT refunds were not based on actual transactions. Instead, Wessels obtained the unlawful refunds by creating fictitious invoices and shifting money between his businesses. He used a significant amount for his personal benefit, of which a significant amount was spent on gambling,” said SARS.

In a separate matter, Wessels was sentenced to seven years imprisonment on 15 charges of VAT fraud last year. An appeal against this sentence has since been dismissed.

“He will serve this seven-year sentence concurrently with the 12-year sentence handed down on Monday. These successful prosecutions clearly demonstrate that SARS has the skills, experience and determination to effectively detect non-compliance by taxpayers and ensure such perpetrators face the full might of the law,” said the revenue service.

SARS said the convictions are a strong warning to anyone who attempts to avoid their tax obligations through irregular means.

“With this in mind, SARS wishes to assert that the organisation remains resolute, focused and single-minded in ensuring everyone pays their fair share of tax.” – SAnews.gov.za