By Phiwa Sikhondze
In a significant stride towards ensuring fiscal integrity and upholding tax compliance, the Eswatini Revenue Service (ERS) has successfully prosecuted five cases of Value Added Tax (VAT) fraud. The business owners involved have been charged with offenses ranging from charging VAT without proper registration to submitting false invoices and under-declaring output tax.
In a press release, ERS Marketing and Communications Manager, Ntobeko Dlamini, underscored the gravity of these criminal offenses, stating, “VAT fraud is a serious breach of trust and an illegal activity that directly affects the revenue collection necessary for the functioning of essential public services. The ERS takes a strong stance against any attempts to defraud the tax system.”
The prosecuted cases include instances where business owners charged VAT despite being unregistered to do so, as well as cases where registered entities submitted false invoices or deliberately under-declared their output tax. Other growing trends noted by ERS include registered VAT taxpayers who falsify return declarations. These actions not only compromise the revenue collected by the government but also create an uneven playing field for businesses that abide by the law and are compliant.
ERS states that in terms of the VAT Act, the following taxpayers have contravened the provisions of the VAT Act, 12 of 2011(as amended) through their varying incidences.
1. Eric Slabbert Agencies (Pty) Ltd. and Eric Slabbert (Director) appeared at the Manzini Magistrate Court for charging VAT yet not registered, contravening Section 64 (1) (a) of the VAT Act 12 of 2011 (as amended). Both the accused persons were found guilty as charged and the Court duly convicted and sentenced both the Director and the Company to a fine of Six Thousand Emalangeni (E6,000) each and/or three (3) years imprisonment each. However, following mitigation, the net effect was that each accused person had to pay Two thousand Emalangeni (E2,000) each – totaling a fine of E4,000 or Two years imprisonment.
2. Ntophiwa Investments (Pty) Ltd appeared at the Manzini Magistrate Court for charging VAT yet not registered to do so, contravening Section 64 of the VAT Act 12 of 2011 (as amended). The accused persons were found guilty as charged and they were each sentenced to three (3) years imprisonment or a fine of eight thousand Emalangeni (E8000.00). The court suspended the sentence for three years imprisonment and or four thousand Emalangeni (E4000.00). Each accused ended up sentenced to a fine of two thousand Emalangeni (E2000.00).
3. A – Z Logistics (Pty) Ltd appeared at the Manzini Magistrate Court for charging VAT yet not registered to do so, contravening Section 64 of the VAT Act. 12 of 2011 (as amended). The accused company and its directors were found guilty, and they were each sentenced to a ten thousand emalangeni (E10 000.00) fine and four (4) years imprisonment. The court however suspended seven thousand Emalangeni (E7 000.00) and or three (3) years imprisonment, hence each ended up being sentenced to a fine of three thousand Emalangeni (E3 000.00).
4. Khanyisile Norah Dlamini T/A Ekukhanyeni Upholstery (Pty) Ltd appeared at the Manzini Magistrate Court for charging VAT yet not registered to do so, contravening Section 14 (5) (b) of the Value Added Tax No. 10 of 2011 (as amended) and Section 64 of the VAT Act No. 12 of 2011. The accused was sentenced to E10 000.00 fine or 4 years imprisonment. The sentence was suspended for 3 years, and the fine was reduced to E2000.00 which she paid instantly.
5. T.D.E Investments (Pty) Ltd appeared at Matsapha Circuit Court for failure to declare received payments, contravening Section 64 (1) (b) (i) of the VAT Act 12 of 2011 (as amended). The Court found the accused director guilty as charged and was accordingly sentenced to two (2) years imprisonment and/or a fine of two thousand Emalangeni for each count. The court ordered the sentences to run consecutively, meaning that the accused paid six thousand Emalangeni (E6 000.00) as a fine for all the offenses.
Dlamini emphasized that the ERS has implemented robust structures to identify instances of VAT fraud promptly. She stated, “We have invested significantly in modernizing our systems and enhancing our capacity to detect and prevent tax evasion. Our goal is to create an environment where voluntary compliance is the norm, and those who attempt to defraud the system are swiftly identified and prosecuted.
In light of these successful prosecutions, Dlamini cautioned businesses and individuals to adhere to tax regulations and comply with the law. She stated, “The ERS encourages all taxpayers to fulfill their obligations honestly and promptly. We are here to support businesses in their compliance efforts and will take decisive action against those who engage in fraudulent activities.”