Section 59(1)(g) to (i) of the same Act states that any person who intentionally evades payment of tax under this Act, or fraudulently obtains or assists in obtaining a tax refund by another person who is not entitled to such, shall be guilty of an offence. This may include the issuing of any tax invoice, credit or debit note, charging tax where the supply of goods does not occur, and, lastly, the issuing of false documentation in the form of tax invoices, debit and credit notes and any other document falsely intended to claim tax.
With regard to companies doing business in excess of R300 000, but not registered for VAT, the Auditor-General reported that one company in KwaZulu-Natal was paid R423 203, and three companies were paid R1,6 million by the then Department of Minerals and Energy. An amount of R1,2 million was paid out by various departments to companies or CCs that were either registered but did not disclose the VAT amount or VAT number, or charged VAT when they were not registered for VAT.
In light of the above, the committee resolved the following. National and provincial departments should ensure that invoices comply with the VAT Act before they authorise payment. National and provincial departments should withhold payment until proof of registration is obtained from the company or CC, and that proof should first be verified with Sars before any payment is made.
In conclusion, I should mention that the Department of Public Service and Administration welcomed the report as it would assist to effect necessary reforms to the system of declaration of interests. The practical application of the regulatory framework is being reviewed, and Scopa, the Standing Committee on Public Accounts, hopes that plans to extend the system to nondesignated employees will soon become a reality. I thank you. [Applause.]