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SARS's attempts to clamp down on gold-based tax fraud has left a massive loophole. The tax agency has expressed concern that alleged roleplayers are now using pseudo gold mining operations to cover for the introduction of illicit gold and VAT fraud into the legitimate supply chain. AmaBhungane has established that SARS is concerned about one operation on the East Rand spending billions on fly-by-night "suppliers", though the owner insists his business is fully compliant.
For more financial news, go to the News24 Business front page. Recap: In the previous two instalments of this series, we tracked allegations of the rise of a colossal scam to melt down tax-free Krugerrands and employ so-called "invoice factories" to fraudulently claim back VAT. Now we see how SARS's best efforts to kill this practice may have birthed an audacious new scam: fake mines that exploit a tipper truck-sized loophole in recent regulations.
We examine one possible example of how this might work. Once upon a time, Johannesburg was the world's gold mining centre, dominating global production of the yellow metal. Nearly a century and a half after initial discoveries, the mines of the Witwatersrand produce less than 5% of the world's gold and a significant part of the industry essentially consists of industrial-scale scavenging: reprocessing old mine dumps.
And it is becoming apparent that even some of this appears to be a lie. In our previous report on the illicit trade, we showed how dubiously sourced gold, especially Krugerrands, has been disguised as scrap sold by second-hand gold dealers in order to feed refineries. This forms part of a colossal tax fraud scheme, with a fair amount of money laundering on the side.
The use of "in-house" pawn shops came to the fore in a case that reached the criminal prosecution stage in 2021, after a group of alleged illegal gold dealers were arrested following an initial case in 2019. According to an affidavit by Hawks detective Steph Kotzee, the..
. Dewald van Rensburg.
