The SA Revenue Service (Sars) and its sister law enforcement agencies are looking to “crush” the illicit fuel industry, which siphons nearly R4bn from the fiscus on an annual basis, commissioner Edward Kieswetter says.
The tax agency on Friday said it had made strides to this end, pouncing on the black market fuel industry in intelligence-led searches and seizures around the country over the past four months.
These operations, conducted through the National Joint Operational and Intelligence Structure (Natjoints), have zoomed in on 23 operations across Gauteng, Mpumalanga, and KwaZulu-Natal.
A team made up of Sars officials and members of the SA Police Service (SAPS) detained nearly a million litres of “contaminated” diesel fuel — with analysis in some instances showing the seized diesel had up to 68% paraffin content.
The raids, which seized assets to the value of R367m, also found six fuel depots that were in contravention of the Customs and Excise Act, with 12 fuel-transport trucks also identified after suspected “false declaration on importation of an average of 15,000l of fuel per tanker.”
Sars said several criminal cases were registered with the SAPS for customs and excise contraventions and fraud.
Keiswetter said government agencies were working together more closely to detect, prevent and combat fuel adulteration and enforce the Customs and Excise Act.
“The criminal syndicates engaged in these brazen acts have become emboldened to act callously with no restraint in pursuit of their rapacious and criminal gains,” Kieswetter said.
“These syndicates can only underestimate our resolve to eradicate this criminality at their peril. These acts threaten the very foundation of our society. Our message is clear: we will spare no efforts to crush them”.
Business Day reported in October that Sars was confident that it had identified a major player in the multibillion-rand illegal diesel blending market, having shut down two depots in Limpopo and Gauteng where it suspects paraffin was being mixed with diesel on an industrial scale.
The two facilities, in Meyerton and Louis Trichardt, were owned by an entity called Alliance Fuel.
The tax agency initiated an investigation into the company for violations of the Customs and Excise Act related to the illicit trading, transport and “mixing and blending of fuel products”.
Preliminary findings by Sars suggested just how vast Alliance Fuels’ operations were. In 2019-23, the company’s income tax returns showed revenue of about R5.6bn, VAT turnover of R7bn and PAYE of R1.1bn. The company, which has several bank accounts, had inflows of more than R8.6bn during the same period.
Its Meyerton depot is a vast manufacturing site, housing 69 vertical 120,000l steel storage tanks and 23 horizontal 80,000l steel tanks.
On Friday Sars said over the past decade, countries along the Maputo Corridor (SA, Swaziland, and Mozambique) had become primary targets of the illicit fuel trade.
“Sars has established that some importers declare fuel amounting to 40,000l or less, whereas investigation reveals that up to 60,000l of fuel are actually imported. This is called underdeclaration, and documents are falsified to perpetuate this fraudulent activity,” it said.
“Sars has also detected a national trend where many of the fuel-storage and distribution depots are involved in the adulteration of all fuel products, especially through illegal mixing of diesel with paraffin. Fuel adulteration costs the fiscus about R3.6bn per year according to statistics by the International Trade Administration Commission.”
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