The South African Revenue Service (SARS) has welcomed the Supreme Court of Appeal (SCA) judgment which ended the protracted dispute with Africa Cash & Carry.<\/p>\n
The judgment comes after an investigation by SARS into the use of sale suppression systems and the manual manipulation of accounting books.<\/p>\n
\u201cThe investigation revealed the under declaration of sales and the manipulation of stock figures and resulted in estimated income tax and VAT assessments, which were disputed by the taxpayer.<\/p>\n
\u201cThe Tax Court altered the assessments and the taxpayer exercised its right of appeal to the SCA,\u201d said SARS.<\/p>\n
Some of the key legal principles the SCA pronounced on included the powers of the Tax Court to alter assessments under section 129(2)(b) of the Tax Administration Act, as opposed to the power to remit the assessment back to SARS and an interpretation of what SARS\u2019 onus is when it is required to prove that an estimated assessment is reasonable.<\/p>\n
\u201cThe SCA upheld the Tax Court order, which inter alia\u00a0<\/em>altered the assessments and confirmed SARS\u2019 imposition of 200% additional tax. The SCA dismissed the taxpayer\u2019s appeal and issued a cost order in favour of SARS,\u201d said the revenue service in a statement.<\/p>\n It said it was committed to combat intentional tax evasion.<\/p>\n It was further concerned with the compliance levels within the cash & carry industry with a particular focus on \u201cOoplang\u201d schemes involving \u201cGhost Exports\u201d, non-recording of the sale of cellphone airtime, manipulation of loan accounts, claiming fraudulent invoices for VAT and Income Tax purposes, utilisation of intermediary shell companies to create invoices and sales suppression systems.<\/p>\n
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