South Africa is losing billions of dollars as some second-hand industry players are allegedly engaged in a VAT fraud scheme based on illicit gold exports, according to media reports citing the tax collector.
AmaBhungane reports that the South African Revenue Service (SARS) conducted an investigation into the second-hand gold industry and found evidence of a multibillion-rand tax fraud scheme.
Two unnamed two companies were said to have claimed R24.4 billion between 2012 and March 2020 in allegedly fraudulent VAT refunds.
Gold exports are zero-rated for VAT in South Africa, but securing gold scrap locally carries the standard 15% VAT.
“If you can find a way to buy large amounts of gold for export, without paying the obligatory VAT, you can claim 15% of the value of the gold as a refund from SARS on the tax you never actually paid,” reports amaBhungane.
“Key to the scheme is introducing un-taxed gold into the supply chain and faking VAT payments for this gold.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
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