Tax fraudster gets hefty fine and is ordered to return the money
Tax fraudster gets hefty fine and is ordered to return the money
The Durban Regional Court sentenced Nana Perseverance Magubane (44) to a fine of R300 000 or four years imprisonment, and a further four years imprisonment (wholly suspended for a period of five years with conditions) after she pleaded guilty to the six counts of fraud she committed against the South African Revenue Service (SARS). Magubane pleaded guilty to five counts of fraud for failing to submit tax returns and one count of fraud relating to tax evasion. The state accepted her guilty plea as she was a first time offender and was remorseful for her actions. She also was able to settle the entire amount that SARS had lost.
Magubane was the director of a company, Imbhenge Trading Enterprise CC, which specialises in general construction. Between 2013 and 2017 she failed to submit income tax returns, thus evading her responsibility to pay income tax for this period. She then submitted an income tax return for 2020, using a fraudulent IRP 5 certificate which reflected a PAYE deduction of R2,76m, and SARS refunded this amount to her. This refund extinguished her existing debt with SARS, causing SARS to suffer a prejudice amounting to R3,72m.
The matter came to light when the 2020 tax return was flagged by SARS for an audit as it was claiming a PAYE credit of R2,76m; further it reflected that she had not submitted tax returns for the 2013 to 2017 tax period. Upon investigation by SARS it was established that no IRP5 had been issued to her.
The Asset Forfeiture Unit of the NPA in KwaZulu-Natal obtained a Section 18 confiscation order from the court for R3,72m (the amount of the total prejudice suffered by SARS). To this effect, Magubane has surrendered three free-hold properties, to be realised in terms of section 30 of the Prevention of Organised Crime Act 121 of 1998.
The matter was successfully prosecuted by Advocate Hemi Dulai from the NPA’s Specialised Tax Unit, and the Section 18 confiscation order was successfully obtained by Senior State Advocate Rajendrie Naidoo from the AFU.
The conditions of Magubane's sentence is that she is not convicted of fraud or a similar offence during the period of suspension, she pays the fine of R300 000 and she complies with the confiscation order granted by the court.
The National Prosecuting Authority welcomes the successful finalisation of this matter. This case is indicative of the working relationship between the NPA and SARS, in particular the criminal investigation unit. Both aim to ensure that all those who defraud SARS or evade tax are identified and successfully prosecuted. The finalisation of this matter and the sentence given has been welcomed by SARS. All the NPA, SARS and SAPS officials who worked on the matter are hereby congratulated. Stakeholder engagement in regards to working together to successfully solve tax cases continues to yield fruitful results.
Issued by,
Natasha Ramkisson-Kara
NPA Regional Spokeperson
KZN Division