Sandton ICT Firm Grapples with R20 Million SARS E-Filing Hack, Case Unresolved After a Year

A South African tech enterprise found itself in a financial deadlock as it continues to seek redress for a severe breach of its tax filing system. The Sandton-based Information and Communication Technology (ICT) firm experienced a significant loss due to a cyber attack on the South African Revenue Services' (SARS) e-filing platform, resulting in a misappropriated tax return of R20 million more than a year ago. Despite the company's prompt actions, including issuing a summons for the damages incurred, SARS has yet to thoroughly investigate the breach.

The unnamed company, which suffered the financial setback, is faced with the chilling possibility that the hack may have come from an internal source within SARS – a scenario all too familiar. According to reports by an independent investigator, such tax-related cybercrimes necessitate director-level access, sparking concerns about compromised internal controls and potential collusion.

Comparable instances of internal cyber threats include the case of Mol Pro Consulting, where a firm accused of tax fraud identified the intrusion of a former SARS employee into its e-filing account. Mol Pro's allegations illuminate a pattern of unauthorized access and manipulation of tax accounts dating back years. In an alarming twist, the ex-employee linked to Mol Pro's account is associated with other companies that have come under scrutiny for tax anomalies.

SARS's criminal investigation body, along with the National Prosecuting Authority (NPA), however, maintain their stance, pursuing Mol Pro and its directors notwithstanding the revelations. Khothatso Moletsane, a director at Mol Pro, voices concerns over what he perceives as SARS's misuse of its investigative power to unfairly target the company.

In response to the growing alarm over such incidents of suspected internal corruption, the minister of finance has permitted the Office of the Tax Ombud (OTO) to probe into SARS's processes and their efficacy in supporting victims of fraud. Gert van Heerden from OTO hinted at a systemic review of SARS, inspired by direct insights from affected taxpayers and professionals.

The unfortunate legacy of the state capture era lingers, as indicated by a former government insider. Prior to this period of maladministration, SARS was celebrated for irrefutable enforcement and advanced modernization. The subsequent erosion of these strengths underscores the present-day challenges faced by the organization and, by extension, South African taxpayers and businesses.

The continued pursuit of justice by the Sandton ICT firm amid SARS's sluggish response encapsulates the broader struggle of confronting sophisticated e-crime in a complex tax ecosystem. It underscores the need for robust cybersecurity measures, expeditious investigations, and accountability among revenue service establishments.