Racehorse administrator sentenced to 10 years for VAT fraud and theft

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The South African Revenue Service (SARS) welcomes the sentencing of a businesswoman to an effective 10 years imprisonment for submitting fraudulent claims for Value-Added Tax (VAT).

The businesswoman, Ms Sheritha Hariram, age 55, of Reservoir Hills, Durban, was sentenced in the Pinetown Magistrate’s Court on Tuesday 29 September 2020 on six counts of fraud amounting to
R1 981 762.19 and three theft charges amounting to R1 195 706.39.

The ten-year effective sentence came about after the magistrate sentenced her to two terms of 10 years each and two terms of five years each, resulting in a total of 30 years direct imprisonment. However, all of the sentences were ordered to run concurrently.

The magistrate heard evidence that Ms Hariram registered a company, Gallop Administration CC, whilst she was still working for a firm of accountants who were doing the accounting work for a horse-racing administration company.

Gallop Administration then applied to SARS to be appointed as a horse-racing agent. With such authority, Gallop Administration was authorised to claim VAT refunds on behalf of racehorse owners who were not registered for VAT.

The court found that Ms Hariram had used agents to solicit clients in the racehorse industry and paid them a commission for any clients sent to her. Gallop Administration would charge their clients 20% of the VAT that the company was able to claim from SARS.

However, it was also found that Ms Hariram had inflated VAT claims for a number of clients and had pocketed the inflated amounts.

SARS Commissioner Edward Kieswetter applauded the investigators who were responsible for the successful conviction and sentencing on Tuesday.

“SARS is deeply committed to uproot criminality especially as it relates to tax related matters. I am glad that the courts are taking these crimes seriously and handing down these severe sentences. Taxpayers need to understand that they will not get away with defrauding SARS which is in effect a crime against the poor and vulnerable in our society who depend on state assistance.

“My sincere thanks must go to our investigators who put their skills to work in order to expose such blatant and criminal abuse of VAT. If it were not for their dedication and persistence we would not be able to prosecute these criminals who lack any sense of morality or integrity.”

He said individual taxpayers who need to file income tax returns as part of Filing Season need to take note that SARS will not tolerate any attempt to defraud the people of South Africa.

Furthermore, SARS will continue to provide clarity and certainty to taxpayers in order to meet their obligations by making it easy for them to comply. Equally, it will make it hard and costly to those who are determined to engage in criminal malfeasance.