The South African Revenue Service (SARS) says it is ramping up efforts to disrupt the illicit economy in the country, specifically targeting corruption in government departments—including among its own officials.
The group said it is committed to “eradicating all forms of corruption, collusion, and criminal subversion of customs and tax processes, internally and externally”.
However, its Illicit Economy Strategy specifically prioritises corruption and fraud within government departments, it said, adding that search-and-seizure operations are already underway.
“SARS has been investigating allegations that customs-inspection teams colluded with clearing agents and importers to manipulate physical inspections in exchange for cash bribes.
“Financial analysis identified under-declared taxable income exceeding R45 million, resulting in income tax prejudice of about R18 million.”
To disrupt this scheme, SARS has executed search-and-seizure and preservation orders against SARS officials and related parties to secure evidence and assets.
The latest actions taken by SARS relate to six current and former SARS employees, as well as related taxpayers and traders.
The persons in question are alleged to have failed to comply with their statutory obligations as taxpayers by participating in a corrupt scheme.
According to SARS Commissioner Edward Kieswetter, the latest enforcement action is part of concerted efforts to enforce compliance without fear, favour or prejudice.
“Those who choose to abuse this mandate, whether from within SARS or from outside, have committed a crime and must face the consequences,” he said.
Kieswetter said that SARS places trust in the officials who serve at the frontline of collecting revenue due and protecting legitimate trade.
“This responsibility demands conduct beyond reproach and unquestionable integrity. Any deviation from this standard undermines the state and places the organisation into disrepute,” he said.
“We cannot tolerate any acts of corruption. This is a red line that no one must cross, and no position inside or outside SARS places anyone above the law.”
Government officials in the crosshairs
To give full effect to the National Illicit Economy Disruption Programme, SARS will work with SAPS and the NPA to yield successful criminal investigations and prosecutions.
“South Africans can expect more in this regard soon,” the revenue service said.
SARS said that, wherever evidence points to criminality, the taxman will detect and pursue it, disrupt the scheme, and recover what is owed to the fiscus.
It added that SARS will hold all criminally involved individuals accountable, no matter the complexity or time required to do so.
“Most SARS employees, traders, and taxpayers act honestly and comply with the law,” Kieswetter said.
“These recent enforcement actions were taken to protect them, preserve fair competition, and ensure that revenue intended for the public good is not siphoned away through corruption.”
However, despite the revenue service’s lofty promises, reining in the illicit economy remains a tough ask.
By its own admission—in presentations on the Tobacco Products and Electronic Delivery Systems Control Bill—the illicit tobacco trade alone has proven to be a behemoth.
Citing three research papers, the revenue service pointed to the illicit tobacco industry in South Africa accounting for 60% to 75% of the entire sector, with tax losses of R51 billion to R84 billion.
As a result, the sector is now flooded with crime cartels, syndicates and gangs—including foreign operations—spilling into other illicit markets.
Critics, such as the Free Market Foundation, have argued that government policy, higher taxes, and new measures being punted by the Department of Health will exacerbate the issue.
SARS is aiming for greater and harsher enforcement to be the deterrent the country needs.
SARS asked members of the public and industry to report suspected bribery, fraud, or customs irregularities through established channels.
