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Vat fraudster sentenced to 15 years in jail

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Nokuthula Cynthia Nene, a Soweto woman convicted of VAT fraud, was on Tuesday sentenced to 15 years imprisonment.

The Johannesburg specialised commercial crimes court suspended seven years of the sentence for five years on condition that Nene does not repeat the offence.

She was convicted on 25 counts of fraudulently submitting VAT returns to Sars on behalf of Nokune Trading CC of more than R1m between July 2008 and July 2012.

National Prosecuting Authority spokesperson Phindi Mjonondwane said a business entity is compelled under certain conditions to register for VAT.

The entity is referred to as a VAT vendor and must levy VAT on the supply of goods and services, referred to as output tax.

The vendor is entitled to claim VAT on expenses incurred, be it capital or operational expenses, provided it is for the furtherance of the business as permissible by the VAT Act, referred to as input tax,

VAT vendors must submit periodic returns to Sars accounting for both input and output tax.

“Sars places upon the bona fides and honesty of each VAT vendor to calculate and administer the amount payable to Sars or refundable to the vendor on a basis of trust between Sars and the vendor.”

Sars requested tax schedules and supporting documents from Nene to substantiate the refund claims, but she failed, refused or neglected to submit the required supporting documents.

This prompted an investigation by Sars criminal investigator Donavan Kakora.

The investigation revealed Nokune Trading CC was not trading and the only transactions into the bank accounts used by the entity were VAT refund deposits from Sars.

Prosecutor Mzuhleli Mcosini said: “The NPA acknowledges the sentence because tax-related offences hurt the country’s fiscus and directly affect service delivery and hopes it will encourage VAT vendors not to abuse the level of trust placed on them by Sars.”

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Source: TimesLIVE