01 Oct 2015

Jail time for fraudulent VAT refunds Claims

In a recent case, Grundling v the State, the Supreme Court of Appeal (''SCA'') handed down a judgment regarding the imprisonment period for the appellant, who was an accomplice in a scheme defrauding the South African Revenue Service by falsifying VAT refund claims between April 2006 and July 2008.

The High Court held that the appellant knew that her actions were fraudulent and she knowingly participated in the scheme. The High Court imposed a sentence of 8 years for the 30 counts of contravening section 59(1)(a) of the Value-Added Tax Act 89 of 1991 (''VAT Act'').

The SCA however reduced the imprisonment term from 8 years to 3 years, taking the mitigating factors into consideration, especially the fact that the primary perpetrator was absent at the time that the matter went to court and that in terms of section 59(1)(a) of the VAT Act, the maximum period for imprisonment is 5 years.