Tax practitioner granted R50,000 bail in alleged R9.6m SARS fraud case

Francis Muleso, a tax practitioner accused of misrepresenting a close corporation’s tax liabilities, has been granted R50,000 bail in a case involving alleged financial prejudice of more than R9.6 million to SARS.

Tax practitioner Francis Muleso has been granted R50,000 bail in connection with an alleged tax fraud scheme that reportedly caused the South African Revenue Service (SARS) financial prejudice exceeding R9.6 million.

Muleso, 45, appeared before the Mthatha Specialised Commercial Crimes Court in the Eastern Cape on Monday following his arrest by the Hawks.

Eastern Cape Hawks spokesperson Warrant Officer Ndiphiwe Mhlakuvana said the arrest was carried out by the Mthatha Hawks' Serious Commercial Crime Investigation team.

The case relates to the alleged submission of fraudulent tax returns and the misrepresentation of a close corporation's financial position and tax liabilities between March 2016 and March 2020.

Mhlakuvana said Muleso, in his capacity as a tax return practitioner, allegedly misrepresented the entity's taxable position to SARS by submitting nil income tax returns despite the alleged existence of taxable business income.

SARS reportedly detected irregularities, prompting a referral to the Hawks for further investigation.

“A subsequent examination of the close corporation's banking records and tax declarations allegedly revealed significant discrepancies in its value-added tax (VAT) submissions,” Mhlakuvana said.

According to the investigation, output tax was allegedly understated by more than R2.7 million, while input tax claims were allegedly overstated by more than R6.1 million.

“The alleged VAT irregularities resulted in reported financial prejudice of R8,854,305.86,” Mhlakuvana said.

“When the alleged VAT and income tax liabilities are combined, the total reported financial prejudice to SARS exceeds R9.6 million.”

Mhlakuvana said Hawks investigators arrested Muleso after a warrant was issued. He was apprehended at the KuGompo City Magistrates' Court, where he had appeared in connection with a separate matter involving similar charges.

Muleso subsequently appeared before the Mthatha Specialised Commercial Crimes Court, where he was granted bail of R50,000.

The matter was postponed to January 18, 2027 for the contents of the docket.

“The investigation is ongoing, and further arrests are imminent,” Mhlakuvana said.