Modack tax fraud trial delayed as judge recuses himself
Judge Mark Sher has recused himself from the R46 million SARS fraud trial just weeks before it was due to start. As a result, Modack and his co-accused will have to wait even longer to have their day in court.
Modack's lawyer, Advocate Bash Sibda told the court last month his client wouldn't get a fair trial if Sher stayed on the case after he presided over Modack's bail appeal in March 2023, in the case where he stands accused of murdering cop Lieutenant-Colonel Charl Kinnear.
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The South African
a day ago
- The South African
Growing calls for SASSA grant recipients to be exempt from TAX
A latest deep dive into South Africa's tax revenue methodology makes a sound argument for SASSA grant beneficiaries being exempt from tax. By the same rationale, government employees should be exempt from tax, too. But why exactly? According to the latest tax revenue figures from the South African Revenue Service (SARS), the country generated R1.1 trillion in 2024/2025. Of that, R267 billion was generated through personal income tax (PIT) and value-added tax (VAT) of SASSA grant recipients and government employees. The argument against tax exemption is that too many residents (45%) receive a SASSA grant of some sort. Image: File There is a perfectly sound argument that this amount going to SASSA beneficiaries and government employees should be exempt from tax. Roughly one quarter of South Africa's tax revenue is money the government pays out as it sees fit and then re-appropriates back to itself, reports Daily Investor . Therefore, economists and financial experts believe that government employees and SASSA grant recipients could just as well be exempt from tax. The argument being it's 'inefficient and wasteful' to pay SASSA grants using tax collections, only to tax a portion of the funds back into the fiscus. As of 2025, roughly 45% of the country's population receives a government grant of some sort. This accounts for the second highest spend of national budget, after debt servicing. The current tax approach merely moves 25% of the fiscus around 'wastefully' with no real benefit. Image: File However, the complexity and potential for fraud is ultimately what experts say makes this approach largely unfeasible. While SARS collected R1.1 trillion total revenue in 2024/2025, R762 billion was shelled out to SASSA grant recipients and government employees. At a personal income tax rate of 21.3%, government employees were responsible for R162 billion income generation. This is roughly 25% of all revenue received. Combined with VAT, the amount payable is more than R100 billion. This means government employees and social grant recipients are responsible for around 23% of all VAT receipts. While private consumption accounts for 77%. Total Personal Income Tax in 2024/2025 – R651 400 000 000 (100%) (100%) Private Employee Personal Income Tax – R488 988 565 000 (75%) (75%) Government Employee/SASSA Personal Income Tax – R162 411 435 000 (25%) Total VAT Receipts 2024/2025 – R447 600 000 000 (100%) (100%) VAT Receipts on Private Consumption – R342 576 718 725 (77%) (77%) VAT Receipts on Government Employees – R81 011 281 275 (18%) (18%) VAT Receipts on SASSA beneficiaries – R24 012 000 000 (5%) Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
3 days ago
- IOL News
How to protect yourself from tax scams this Sars filing season
With tax season upon us, the Southern African Fraud Prevention Service warns of a surge in scams targeting unsuspecting taxpayers. Image: File photo. The Southern African Fraud Prevention Service (SAFPS) has issued a stern warning to the public, urging greater vigilance during the tax season. According to the SAFPS, tax filing season in South Africa is traditionally viewed as a period of economic accountability and fiscal discipline. It offers individuals the opportunity to realign their financial affairs and contribute to the nation's revenue system. Yet, beneath this routine of compliance, a darker threat is emerging—an alarming spike in digital fraud targeting unsuspecting taxpayers. The SAFPS says with the South African Revenue Service (Sars) rolling out pre-assessments to simplify submissions, fraudsters are leveraging this convenience to orchestrate increasingly sophisticated scams that mimic official Sars communication. SAFPS CEO Manie van Schalkwyk says: "Fraudsters are exceptionally active during this period, and taxpayers must stay alert to the latest tactics being used to steal personal data and funds". Van Schalkwyk says that scammers often impersonate Sars officials in a bid to manipulate victims into voluntarily handing over sensitive information or making fraudulent payments. 'There are a few scam tactics that the public should be aware of to protect themselves,' he says. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Phishing Emails and SMSs Phishing remains a dominant tactic, with scammers sending convincing emails and text messages designed to resemble legitimate Sars correspondence. These messages frequently include links to bogus websites where personal details are solicited. "Our brains are conditioned to gloss over subtle differences unless we're actively scanning for them. This is exactly what makes these tactics so dangerous," says Van Schalkwyk. Fraudsters may alter a single character in a hyperlink, replacing 'South Africa' with 'South Afrìca,' for example, to trick users into clicking. These links often redirect users to malicious websites that compromise personal data under the guise of verifying banking details, issuing refunds, or auditing returns. 'The email may say it's from Sars and look realistic, however, if you look at the actual email address, it is not an official Sars email address. Scammers can change the display name to appear as Sars, and if you are not concentrating, you could click on the link or action the request due to fear. Carefully examine the sender's email address, and if it does not include @ – it is likely a scam," he says. Impersonation of Sars Official Van Schalkwyk says the growing prevalence of impersonation scams, where con artists initiate direct contact claiming to be Sars representatives. He says these criminals often deploy urgency and panic to gain trust, warning taxpayers of supposed errors or potential fines. "It is important to note that an official Sars representative will never ask for this information," he says. Their endgame? Extracting tax numbers, ID numbers, or login details under the guise of offering assistance. eFiling profile hijacking Another disturbing trend is the hijacking of eFiling profiles. Fraudsters exploit personal information to access legitimate profiles, change banking details, and reroute refund payments into fraudulent accounts. These cases reflect a more sophisticated form of identity theft linked to previous, seemingly legitimate Sars interactions, says Van Schalkwyk. One reported victim, a 68-year-old taxpayer, lost R37,000 after his refund was paid into an account fraudulently created under his name. Despite providing accurate banking information during his filing appointment, the payment was diverted. Similar incidents across multiple banks have highlighted the scale and complexity of this crime, he says. Fraudulent letters of demand Sars has flagged a surge in fake letters purporting to be from Sars attorneys, demanding urgent payments to illegitimate accounts. These communications, while official-looking, are designed to elicit panic-driven financial transfers and prey on taxpayer confusion. Stay safe: cybersecurity tips from SAFPS In light of these dangers, SAFPS urges taxpayers to adopt robust security measures and remain alert to red flags: Never share your eFiling username or password. Do not disclose banking details, PINs, or card info via email or SMS. Sars will never request this. Verify payment instructions carefully. Use your secure eFiling profile or check Sars-approved banking channels. All major banks list Sars as a preloaded beneficiary. Avoid clicking on links in unsolicited emails, SMSs, or WhatsApp messages. Use the official Sars website and verified channels. Enable multi-factor authentication and avoid transacting over public Wi-Fi. Be cautious of communications that induce panic or urgency. This is a common tactic used to bypass rational scrutiny. "Proactive awareness is the strongest defence against digital fraud during this critical financial period," says Van Schalkwyk. Taxpayers who suspect their refunds have been compromised should act immediately by: Contacting their bank to freeze any unauthorised transactions. Reporting the incident to Sars. Opening a case with the South African Police Service (SAPS). Logging the complaint with SAFPS via PERSONAL FINANCE
IOL News
4 days ago
- IOL News
High Court confirms preservation order against Amalgamated Tobacco Manufacturing in tax evasion case
TAX Justice South Africa (TJSA) in a statement on Tuesday welcomed a High Court judgment confirming a preservation order against Amalgamated Tobacco Manufacturing and 19 other entities, who are accused of a sophisticated multi-million-rand tax evasion racket. . Image: Courtney Africa/Independent Newspapers TAX Justice South Africa (TJSA) in a statement on Tuesday welcomed a High Court judgment confirming a preservation order against Amalgamated Tobacco Manufacturing and 19 other entities, who are accused of a sophisticated multi-million-rand tax evasion racket. The Fair-Trade Independent Tobacco Association (FITA), who represents independent cigarette manufacturers, respects the judicial process and the role of the courts in upholding the rule of law. In the judgment, the High Court of South Africa, KwaZulu-Natal Local Division, Durban ruled that the provisional preservation order granted on February 27, 2025 against the ninth and tenth respondents (South African Revenue Service v Kajee and Others) is confirmed. TJSA said that the KwaZulu-Natal High Court has dismissed challenges to the South African Revenue Service's preservation order, allowing Sars to continue securing assets while investigating more than R96 million in suspicious financial transfers involving the Pietermaritzburg-based cigarette maker. TJSA founder Yusuf Abramjee said that this case demonstrates exactly why Sars needs robust investigative powers and why the illicit tobacco trade continues to devastate our fiscus. 'When a court finds a tobacco manufacturer has a case to answer over millions in under-declared income, it confirms what we've been saying for years – the industry is riddled with tax dodgers who are bleeding our country dry.' TJSA said that Amalgamated Tobacco – as well as local industry body the Fair-Trade Independent Tobacco Association (FITA) – is fighting Sars's legal right to install surveillance cameras in cigarette factories. Abramjee said that while legitimate manufacturers should welcome transparency measures, those opposing surveillance systems clearly have something to conceal. 'If the allegations in this case are true, then it will vindicate Sars's approach to enhance monitoring of the tobacco sector. The illicit cigarette trade now commands more than 70% of the South African cigarette market, robbing the country of approximately R30 billion in tax revenue annually. This massive revenue loss undermines public health initiatives, education funding, and essential government services.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Abramjee added that this R96 million case is just the tip of the iceberg. 'The Government must ensure that Sars has the resources to expand these investigations to other major players in the illicit tobacco trade.' FITA chairperson Sinenhlanhla Mnguni said that they note the recent judgment delivered by the High Court of South Africa, KwaZulu-Natal Local Division, Durban, in the matter of Commissioner for South African Revenue Service v Kajee and Others (Case No. D1514/2025). 'FITA respects the judicial process and the role of the courts in upholding the rule of law. FITA has consistently and unequivocally supported all legitimate efforts by the state, regulatory authorities, and industry stakeholders to combat smuggling and the illicit trade in cigarettes. These illicit activities undermine the integrity of the market, deprive the fiscus of vital revenue, and harm legitimate businesses across the sector.' Mnguni added that they commend any actions that promote transparency, accountability, and fair competition, and stand ready to collaborate with Sars and other entities to eradicate these threats. 'Compliance in the tobacco industry must be approached holistically, taking into account the full spectrum of challenges and dynamics at play. It is concerning when enforcement appears to be selectively focused on isolated aspects, potentially overlooking broader systemic issues that contribute to non-compliance. This narrow lens risks distorting the true picture of the industry, which is far more complex.' Mnguni said that they urge all stakeholders, including Sars, to adopt a comprehensive and equitable strategy that addresses root causes such as economic disparities, regulatory gaps, and unfair trade practices affecting smaller, independent players. 'Only through such a balanced approach can we achieve sustainable compliance and a level playing field for all participants in the South African tobacco market.' Professor Corné van Walbeek, the director of the Research Unit on the Economics of Excisable Products, from the University of Cape, said that illicit trade in South Africa is a very serious matter. 'The illicit trade in cigarettes accounts for more than 50% of the total market. A large proportion of illicit cigarettes in South Africa are under-declared local production. The fact that Amalgamated Tobacco Manufacturing Company has been charged for tax evasion by Sars is long overdue.' BUSINESS REPORT TAX Justice South Africa (TJSA) in a statement on Tuesday welcomed a High Court judgment confirming a preservation order against Amalgamated Tobacco Manufacturing and 19 other entities, who are accused of a sophisticated multi-million-rand tax evasion racket. . Image: Courtney Africa/Independent Newspapers TAX Justice South Africa (TJSA) in a statement on Tuesday welcomed a High Court judgment confirming a preservation order against Amalgamated Tobacco Manufacturing and 19 other entities, who are accused of a sophisticated multi-million-rand tax evasion racket. . Image: Courtney Africa/Independent Newspapers
