Failure by VAT vendor to pay VAT collected over to commissioner not Theft

DIRECTOR OF PUBLIC PROSECUTIONS, WESTERN CAPE v PARKER 2015 (4) SA 28 (SCA)

Revenue — Value-added tax — Offences — Failure by VAT vendor to pay VAT collected over to commissioner — Whether misappropriation by VAT vendor of VAT collected on behalf of commissioner sustaining charge of common-law theft — Value – Added Tax Act 89 of 1991, ss 28(1)(b) and 58.

A VAT vendor who misappropriates an amount of VAT which it collected on behalf of the South African Revenue Service (Sars) cannot be charged with the common-law crime of theft.
This is because the Value-Added Tax Act 89 of 1991 is a scheme with its own directives, processes and penalties, and does not confer on the vendor the status of a trustee or a tax-collecting agent of Sars — the basis advanced for such misappropriation constituting theft. Instead, the Act creates a sui generis debtor – creditor relationship which entitles Sars to sue a non-paying vendor for payment and/or to have such vendor charged with s 58 offences which, significantly, does not include common-law theft.

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