SARS

18 May 2018 – R30 million worth of Viagra seized at ORTIA

Pretoria, Friday 18 May 2018 – Customs officials of the South African Revenue Service (SARS) have seized 437kg of male sexual enhancement pills (Viagra) with a street value of R30-million.

The pills were seized at the OR Tambo International Airport at the weekend. This represents the biggest bust of sexual enhancement pills by Customs at ORTIA in the past year.

Customs officers became suspicious about the description on the cargo manifest and who it was consigned to. After searching the cases, they discovered the massive haul of Viagra.

There are increasing incidents of illicit products being smuggled into the country without obtaining the required permits and being sold on the black market.

Customs has been tasked with detaining all medicaments coming into the country on behalf of the Department of Health if they have not been declared correctly or do not have the required permits.

SARS Customs was also involved in the following cases over the past few months:

  • On 15 January 2018, a passenger arriving from India was intercepted and his luggage scanned at ORTIA. The scanner indicated irregular images which resulted in a luggage search. During inspection, 40 000 sexual enhancement tablets, valued at approximately R4-million, was found.
  • On 30 October 2017, a shipment weighing 255kg from Mumbai to Johannesburg was intercepted at a cargo shed. Upon inspection, 35 680 Viagra Tablets, 2 589 Steroid pills and other products were found. The total street value of the consignment was around R5,1-million. 
  • On 14 October 2017, a shipment weighing 17.5kg from India to Johannesburg was intercepted at a cargo shed. Upon inspection, 150 000 Viagra Tablets, valued at approximately R1,5-million.  

All of the above cases were handed over to the Department of Health for further investigation.

The shipment of Viagra detained at the weekend

15 May 2018 – North Gauteng High Court granted an order to give effect to a settlement agreement between SARS and senior SARS official Mr Vlok Symington

Pretoria, 15 May 2018 – On Friday 11 May 2018, the North Gauteng High Court granted an order to give effect to a settlement agreement between the South African Revenue Service (SARS) and senior SARS official Mr Vlok Symington.

The parties agreed, in good faith, to bring all legal and other related proceedings against each other, including disciplinary charges against Mr Symington and Mr Thabo Titi, the bodyguard of SARS Commissioner Tom Moyane, to an end.  These arose from an incident that took place at the premises of SARS on 18 October 2016. These events have been extensively reported on by the media since 2016.

The events leading up to the incident, the incident itself and the disciplinary charges that arose from the incident against Mr Symington and Mr Titi have been reviewed by SARS and both parties have agreed that it would be in the best interest of all that these matters be settled.

In granting the order, the Honourable Mr Justice Louw welcomed the fact that the parties have reached an amicable resolution without the need for further litigation. All parties are now looking forward to continue working towards fulfilling the mandate of SARS and restoring public trust and credibility to this important fiscal institution.

12 May 2018 – Currency worth close to R2 million seized at Cape Town International Airport

Cape Town, Saturday 12 May 2018 – SARS Customs officials at Cape Town International Airport confiscated $156 850 (about R1 946 802) which was hidden in the luggage of a South African man en route to Dubai.

After receiving a tip-off from Customs officials at OR Tambo International Airport (ORTIA), the man was stopped by Customs officials and members of the Detector Dog Unit as he was about to embark on the flight to Dubai.

One of the detector dogs reacted positively to the luggage and the bag was opened up and searched. Customs officials then discovered 10 packets of currency hidden amongst his clothing.

The case – for failure to declare money when departing the country – was handed over to the SAPS for further investigation.

“As part of our integrated operations, the possible smuggling of currency was successfully detected by our officers,” said Chief Officer: Customs and Excise, Teboho Mokoena. “We have noticed recently that passengers who normally use ORTIA to try and take out currency, have started rerouting via other ports. This is why it is important that all of our units work closely together to prevent this from happening. I would like to commend the cooperation amongst the different divisions within Customs which led to this successful bust.”

20 April 2018 – New electronic reporting requirements for Customs clients


Pretoria, 20 April 2018
– This weekend the South African Revenue Service (SARS) will introduce a new electronic cargo reporting system which will be able to track the movement of cargo coming into and leaving the country. 

The paperless cargo reporting system will bring an end to one of the last remaining paper-based processes in SARS. It will provide Customs officials with the capability to track goods from beginning to end.

Chief Officer of Customs and Excise, Teboho Mokoena, says the electronic reporting system will expedite the processing of legitimate trade and improve the management of risk for goods coming in and leaving the country.

Customs clients impacted by the new electronic reporting system include shipping lines, airlines, the national rail carrier, road hauliers, freight forwarders, port and airport authorities, terminal operators, wharf operators, transit shed operators, licensees of depots and registered agents.

South Africa will be following international trends with the introduction of ‘advance reporting of containerised cargo’ destined for South African ports. This reporting requires carriers and forwarders to submit ‘advance loading notices’ to SARS Customs at both master and house bill of lading levels, 24 hours prior to vessel departure.

The implementation of the electronic reporting requirements falls under Customs’ Reporting of Conveyances and Goods (RCG) project, which is one of three main pillars of SARS’s New Customs Acts Programme (NCAP).

Since the Customs Control Act and Customs Duty Act were published in the Government Gazette in 2014, much work has been taking place in SARS to finalise Rules to the Acts, develop the required systems and ensure trade readiness for the implementation.

As the new Acts will only be operationalised on a date yet to be announced by the President of the Republic, it was decided to introduce certain elements of the new legislation under the current Customs and Excise Act, 1964.

The first phase of NCAP to go live is RCG, albeit under the current 1964 Act. Under RCG, it will be mandatory for all cargo reporters in the air, sea, rail and road industries and involved in the movement of international cargo to submit reports to SARS electronically.

One of the benefits to trade of electronic cargo reporting is that it will save on costs involved in paper reporting. For example, carriers can spend hundreds of thousands of rand a year just in the paper and administrative costs associated with submitting paper manifests to SARS offices.

The impact on land clients will be minimal as most road carriers have already been submitting electronic reports since MPR was introduced in 2016.

However, for many sea and air modality clients, who have never submitted electronic reports before, the implementation may take more time to get used to.

During the go-live SARS will have an Operations Support Centre which clients can contact by emailing OSC@sars.gov.za.  For more information, click here.

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19 April 2018 – BRICS members to strengthen Customs co-operation

Durban, 19 April 2018 – Delegates from BRICS member countries (that is Brazil, Russia, India, China and South Africa) have agreed to strengthen co-operation and mutual assistance to facilitate trade between member countries and other developing countries.

The BRICS Customs administrations gathered in Durban for the 10th Annual BRICS Customs Experts Technical Working Group hosted by the South African Revenue Service (SARS) this week.

One of the main focus areas of the high-level meeting was the establishment of an enabling legal framework for BRICS Customs cooperation.

The BRICS countries have implemented various models of Authorised Economic Operator (AEO) programmes, which give preferential treatment to certain traders, importers and exporters.

While AEO programmes have demonstrated their effectiveness in strengthening supply chain management and economic competitiveness, the BRICS members are at different stages of development.

The meeting agreed that it would be more beneficial at this stage to share information and identify priorities with the aim of working towards bi-lateral agreements.

It was further agreed that certain areas of the Customs Mutual Administrative Assistance Agreement (CMAAA) should be improved before adaptation.

It is expected that clarification of the agreement would, apart from the traditional areas of information exchange and investigative assistance, include detailed provisions on cooperation in human resource development, data exchange and addressing of trade grievances.

The meeting emphasised the need to finalise the BRICS Customs Mutual Administrative Assistance Agreement (CMAAA) by 2021.  This would enable the seamless movement of goods among member countries and bring the reality of economic cooperation even closer. 

The meeting also deliberated on the value of an integrated risk management system as a key area in terms of risk identification, not only for Customs but also for tax administration purposes. This will likely form part of the agenda in the upcoming BRICS Tax meetings in June this year, to be hosted by SARS in Johannesburg.

These annual gatherings have been beneficial for BRICS bloc which has seen enhanced collaboration over the last decade.

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16 April 2018 – SARS, NPA to prosecute taxpayers for outstanding returns

PRETORIA, 16 April 2018 – The South African Revenue Service (SARS) has embarked on a new initiative with the National Prosecuting Authority (NPA) to prosecute non-compliant taxpayers, including prominent South Africans, who have failed to submit returns.

Taxpayers who are found guilty will end up with a criminal record.

The initiative has already seen its first conviction in Port Shepstone last week. Mr S Ragunat, as the representative of SPS Distributors, paid an admission of guilt fine of R5 600 in the Port Shepstone Regional Court for non-submission of more than 50 outstanding Value-Added Tax (VAT), Pay-As-You-Earn, (PAYE) and Corporate Income Tax (CIT) returns. He was ordered to and has submitted all the outstanding returns.

Failure to submit a tax or VAT return is a criminal offence in terms of the Tax Administration Act and Value-Added Tax legislation.

During the week of 16 to 20 April, eight outstanding return cases involving hundreds of outstanding returns will appear on court rolls in different parts of the country – including four cases in the Johannesburg Magistrate’s Court on 19 and 20 April.

There will also be cases in Ficksburg and Bothaville in the Free State, as well as the Newcastle Magistrate’s Court in KwaZulu-Natal during the rest of the week.

The campaign marks an intensification of SARS’s Outstanding Returns Project that was launched towards the end of last year when SARS aimed to raise awareness amongst taxpayers about outstanding tax returns.

SARS has over the past few years experienced an unacceptable increase in the non-submission of returns across all tax types, including PAYE, VAT, corporate income and personal income tax.

At the end of March 2018, SARS’s Outstanding Returns Book showed that active taxpayers owed SARS approximately 30 million returns, in many cases showing that multiple outstanding returns were due by a single taxpayer. 

The decision to resort to enforcement of compliance through criminal prosecution is a last resort. All the taxpayers that will appear in court were engaged beforehand and final demands were issued them before the criminal cases commenced. At this stage 36 dockets have been handed over to the NPA.

The significant drop in the submission of returns was one of the key indicators pointing to decreased compliance and was highlighted by Finance Minister Nhlanhla Nene during the announcement of the tax revenue collection figures for the 2017/2018 financial year.

13 April 2018 – Drugs valued at over R30 million bust at OR Tambo this week

Pretoria, 13 April 2018 – South African Revenue Service (SARS) Customs officials at OR Tambo International Airport (ORTIA) this week confiscated 108kg of drugs which were hidden in boxes and declared as ‘calcium carbonate’.

Officials inspected the boxes in the cargo section at ORTIA after they arrived from Kenya on Tuesday. They discovered a white powdery substance and a brown sand-like substance, which they sent to a private laboratory for testing. The results came back positive for the drug ketamine (the white powdery substance) and Acetylanthranil, a base ingredient for Methaqualone (mandrax).

The case has been handed over to the Hawks for further investigation.

In another incident, a truck leaving Lesotho was stopped yesterday (12 April) at Ficksburg border post in the Free State and searched after the driver acted suspiciously. Customs officials then discovered 207 bags filled with cannabis weighing over 6000kg. The total value of the cannabis is over R9million. The driver was taken into police custody.

SARS Customs this week also released statistics for the total number of busts which took place over the past financial year.

The combined value of goods confiscated from 1 April 2017 to 31 March 2018 adds up to over R 2.3-billion.

According to Chief Officer for Customs and Excise, Mr Teboho Mokoena, the seizure of counterfeit clothing, footwear and other goods made up the biggest contribution, amounting to R1.8-billion.

This was followed by the seizure of narcotics, including Tik, cocaine and other drugs, amounting to over R326-million.

Some of the statistics include:

  • Narcotics: 728 busts valued at R R326 898 911
  • Cigarettes: 383 busts valued at R29 659 899
  • CITES (including endangered species such as rhino horns and abalone): 55 busts valued at R45 298 167
  • Currency: 21 busts valued at R79 304 889
  • Viagra / Viagra Generics: 214 busts valued at R17 717 200
  • Counterfeit clothing, footwear and other goods: 1698 busts valued at R1 811 678 633
  • Clothing and Textiles (second hand and other infringements): 51 busts valued at R76 860 835
  • Alcohol: 269 busts valued at R4 647 665

Some of the high-profile busts which took place during this period include a special high-visibility joint operation, led by SARS Customs and involving various government agencies, in Cape Town on 1 and 2 March 2018.

It resulted in 46 busts of goods with a value of R33 229 233. The biggest bust of the operation was the discovery of uncut crystal methamphetamine (tik) with an estimate value of R30-million stashed in fridges on a truck which arrived in Cape Town from Johannesburg.

In the same truck, a large amount of suspected counterfeit clothing was also discovered. The truck driver was arrested.

Other highlights include the seizure of:

  • Rhino horn with an estimated value of R5 752 000 en route from South Africa to Hong Kong, at OR Tambo International Airport
  • Cocaine with an estimated value of R56 676 900 en route from Brazil to Australia via South Africa,  at OR Tambo International Airport
  • Cocaine with an estimated value of R10 069 500 en route from Brazil to Namibia via South Africa, at OR Tambo International Airport
  • Cocaine with an estimated value of R7 480 200 en route from Brazil to Congo via South Africa seized at OR Tambo International Airport
  • Crystal Meth with an estimated value of R7 200 000 from Nigeria to South Africa, at OR Tambo International Airport
  • Rhino horn with an estimated value of R4 600 000 en route from Zambia to Hong Kong via South Africa, at OR Tambo International Airport
  • Currency (US dollars) valued R6 717 848 en route from South Africa to Dubai, at OR Tambo International Airport
  • Ecstasy with an estimated value of R33 600 000 en route from Cameroon via Kenya to South Africa, at OR Tambo International Airport
  • Currency (US dollars) valued R10 328 010 en route from South Africa to Canada, at OR Tambo International Airport
  • Currency (US dollars) valued R10 069 249 en route from Angola to South Africa, at OR Tambo International Airport.
  • Sexual Enhancement Tablets valued R5 260 000 en route from India via Seychelles to South Africa, at OR Tambo International Airport
  • Currency (Rands and US dollars) valued R10 323 591.00 en route from South Africa to Dubai, at Cape Town International Airport
  • Currency (Rands and US dollars) valued R6 198 828.50 en route from South Africa to Dubai, at King Shaka International Airport
  • Crystal Meth with an estimated value of R6 180 000 en route within South Africa, at OR Tambo International Airport
  • Abalone with an estimated value of R10 000 000.00 en route from South Africa to China, at Port Elizabeth Harbour
  • Kamagra (Generic Viagra) valued at R4 000 000 en route from India to South Africa, at OR Tambo International Airport
  • Ephedrine with an estimated value of R17 202 000 en route from Kenya to South Africa, at OR Tambo International Airport
  • Currency (US dollars and pound sterling) valued R15 000 000 en route from South Africa to Dubai, at OR Tambo International Airport
  • Viagra valued R9 000 000 en route from Dubai to South Africa, and OR Tambo International Airport
  • Crystal Meth with an estimated value of R8 358 000 en route from Rwanda to South Africa, at OR Tambo International Airport
  • Ephedrine with an estimated value of R17 202 000 en route from Kenya to South Africa, at OR Tambo International Airport

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11 April 2018 – SARS to host BRICS heads of Customs authorities

PRETORIA, 11 April 2018 – The South African Revenue Service (SARS) will host the Customs Cooperation Meeting, which is a representation of the heads of customs authorities from BRICS member countries: Brazil, Russia, India, China and South Africa with a view to enhance relations and further improve co-operation and promote development among BRICS member countries.

The heads of customs administrations from BRICS member countries will meet in Durban from 18 to 19 April 2018. This meeting will be preceded by a customs experts meeting at the same venue from 16 to 17 April 2018. SARS will also host the tax experts and the heads of tax administrations in June 2018. These meetings are part of government wide departmental meetings that forms part of the build up to the 10th BRICS Summit which South Africa will host as chair of BRICS in August 2018.

The South African Government has committed itself to using its role as chair of BRICS in 2018 to strategically plan towards the goal of improved co-operation in the next decade.

Government has also committed itself to follow through on the agenda that was set in Xiamen, China in 2017, when China was chair, to ensure maximum synergy and continuity.

This will be the second time that South Africa is hosting the BRICS Summit, after previously hosting the Summit in March 2013.

South Africa’s membership of BRICS is a vital element in pursuit of its foreign policy priorities, including the promotion of the African Agenda, sustainable development, global governance reform and cooperation.

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6 April 2018 – SARS’s stance on the tax treatment of cryptocurrencies

PRETORIA, 06 April 2018 – The South African Revenue Service (SARS) will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.

The onus is on taxpayers to declare all cryptocurrency-related taxable income in the tax year in which it is received or accrued.  Failure to do so could result in interest and penalties.

Taxpayers who are uncertain about specific transactions involving cryptocurrencies may seek guidance from SARS through channels such as Binding Private Rulings (depending on the nature of the transaction).

Increased attentiveness and speculation regarding the future of cryptocurrencies has prompted calls for SARS to provide direction as to how cryptocurrencies should be treated for tax purposes. However, as indicated in this media statement, there is an existing tax framework that can guide SARS and affected taxpayers on the tax implications of cryptocurrencies, making a separate Interpretation Note unnecessary for now.

Cryptocurrency (typified by Bitcoin) is an internet-based digital currency that exists almost wholly in the virtual realm. A growing number of proponents support its use as an alternative currency that can pay for goods and services much like conventional currencies.

In South Africa, the word “currency” is not defined in the Income Tax Act (the Act).  Cryptocurrencies are neither official South African tender nor widely used and accepted in South Africa as a medium of payment or exchange. As such, cryptocurrencies are not regarded by SARS as a currency for income tax purposes or Capital Gains Tax (CGT). Instead, cryptocurrencies are regarded by SARS as assets of an intangible nature.

Whilst not constituting cash, cryptocurrencies can be valued to ascertain an amount received or accrued as envisaged in the definition of “gross income” in the Act.

Following normal income tax rules, income received or accrued from cryptocurrency transactions can be taxed on revenue account under “gross income”.

Alternatively such gains may be regarded as capital in nature, as spelt out in the Eighth Schedule to the Act for taxation under the CGT paradigm.

Determination of whether an accrual or receipt is revenue or capital in nature is tested under existing jurisprudence (of which there is no shortage).

Taxpayers are also entitled to claim expenses associated with cryptocurrency accruals or receipts, provided such expenditure is incurred in the production of the taxpayer’s income and for purposes of trade.

Base cost adjustments can also be made if falling within the CGT paradigm.

Gains or losses in relation to cryptocurrencies can broadly be categorised with reference to three types of scenarios, each of which potentially gives rise to distinct tax consequences:

(i) A cryptocurrency can be acquired through so called “mining”. Mining is conducted by the verification of transactions in a computer-generated public ledger, achieved through the solving of complex computer algorithms. By verifying these transactions the “miner” is rewarded with ownership of new coins which become part of the networked ledger.  


This gives rise to an immediate accrual or receipt on successful mining of the cryptocurrency. This means that until the newly acquired cryptocurrency is sold or exchanged for cash, it is held as trading stock which can subsequently be realized  through either a normal cash transaction (as described in (ii) or a barter transaction as described in (iii) below. 

(ii) Investors can exchange local currency for a cryptocurrency (or vice versa) by using cryptocurrency exchanges, which are essentially markets for cryptocurrencies, or through private transactions. 

(iii) Goods or services can be exchanged for cryptocurrencies. This transaction is regarded as a barter transaction. Therefore the normal barter transaction rules apply.

Value-Added Tax (VAT)

The 2018 annual budget review indicates that the VAT treatment of cryptocurrencies will be reviewed. Pending policy clarity in this regard, SARS will not require VAT registration as a vendor for purposes of the supply of cryptocurrencies.