R62m VAT fraud conviction spotlights wider battle over impermissible refund claims

The South African Revenue Service has hailed a landmark conviction in a R62 million VAT fraud case as an example of the wider challenge of preventing impermissible refund claims. A 12-year scheme led to the sentencing of André Claude Dickoumba-De-Diguela after he entered a guilty plea over hundreds of VAT refund claims submitted through Assistance Médicale Internationale CC.

Long-running scheme ends in prison sentence

The Specialised Commercial Crimes Court in Palm Ridge sentenced Dickoumba-De-Diguela after a guilty plea agreement to 127 counts of fraud and 66 counts of money laundering related to systematic claims submitted over 12 years. He received 15 years for fraud, with five years suspended, and 10 years for money laundering.

SARS response and framing

SARS Commissioner Dr Johnstone Makhubu commented on the case, saying:

“Fraudulent VAT refund claims are not simple administrative errors. They are carefully calibrated acts of criminality that defraud the country’s revenue base, harm honest taxpayers, and deprive the government of the resources necessary to provide essential public services.”

Scale of the refund-claim problem

SARS reported that its administrative work had prevented R50.1 billion in impermissible VAT refunds in the 2025/26 financial year to date, a 2.3% year-on-year increase. The agency noted that “impermissible refunds are not necessarily fraudulent” and the figure should not be equated with the value of criminal VAT fraud.

The 2024/25 SARS annual report said the organisation had prevented R147.9 billion in impermissible refunds and revenue leakage across the board in that year. In 2024/25, SARS completed 3,757 audit cases, producing assessments amounting to R46 billion. The report stated:

“These audits focused on deliberate non-compliance, including false declarations, non-disclosure of income, and fraudulent refund claims.”

Referrals and major contributors to non-compliance

SARS said 290 cases were profiled and referred for criminal investigation. It reported that outstanding returns, non-registration, and returns submitted without payments accounted for 56.20% of referrals, while organised refund fraud, particularly VAT-related fraud, made up 25.86%. Income-tax fraud and customs and excise violations were also listed among contributors.

Research and system weaknesses

Recent research drawing on SARS audit and VAT return data estimated an average VAT reporting gap of 40.6% between 2016 and 2020, according to an April 2026 working paper by SA-TIED and UNU-WIDER. The source noted this measure does not represent fraud alone.

A University of Johannesburg LLM thesis on taxation identified methods by which VAT fraud can be committed, including under-declaration of output tax, overstating input tax, failure of vendors to register, bogus traders, VAT claimed but not paid over, and claims for non-refundable input VAT.

SARS has acknowledged limitations in its visibility across the VAT supply chain in a discussion paper on modernising VAT administration, saying VAT had the “least supply chain visibility” among tax types from a self-assessment perspective. The paper stated:

“This lack of supply chain visibility exposes the fiscus to revenue leakages, which is time-consuming to detect, and requires frequent audits and verifications.”

What the conviction illustrates

The sentence in the R62 million case underlines SARS’s focus on detecting and prosecuting VAT-related crimes and the broader administrative and compliance work the agency says is necessary to protect the revenue base.