Businessman Jailed for Fraud After Hiding R3.6m Tender Income from SARS

The ruling marks a significant victory in the state’s ongoing crackdown on tax evasion and corruption linked to public procurement.

Businessman Tshepo Khoza has been sentenced to six years in prison, with two years suspended, for fraudulently declaring his company dormant and failing to disclose approximately R3.6 million in income to the South African Revenue Service (SARS). The ruling marks a significant victory in the state’s ongoing crackdown on tax evasion and corruption linked to public procurement.

Fraud Uncovered Through Project Blue Lights

Khoza’s conviction stems from a detailed investigation under Project Blue Lights, which revealed that his company, Grey Apple Trading Enterprise (Pty) Ltd, received lucrative tenders from the South African Police Service (SAPS). The tenders were associated with the DNA project housed within the Forensic Science Laboratory (FSL).

Authorities found that these contracts were secured through Khoza’s family ties to a senior SAPS official—raising serious red flags around nepotism and corruption in state procurement processes.

Charges and Legal Implications

Khoza was found guilty on:

• Three counts of fraud, one of which is classified as a Schedule 5 offence, signalling its seriousness.

• One count of failing to register for VAT, violating section 234 of the Tax Administration Act.

Despite earning millions between 2015 and 2018, Khoza falsely declared the firm inactive and hid its income from SARS. A separate corruption trial, involving additional accused persons, is scheduled to resume on 22 February 2026.

SARS and IDAC Welcome Conviction

SARS Commissioner Edward Kieswetter and IDAC Head Advocate Andrea Johnson praised the coordinated investigative efforts that led to Khoza’s conviction. They stressed that such outcomes reinforce public trust in specialised units tasked with dismantling corruption networks.

Kieswetter reiterated SARS’ firm stance against tax crime, stating: “Tax fraud is not a victimless crime. It is theft from the national fiscus and from the millions who depend on government services. Every rand stolen through fraudulent schemes undermines our country’s ability to deliver on its constitutional mandate. SARS will not tolerate such conduct.”

Part of a Broader Anti-Corruption Strategy

This case forms part of a larger initiative to fight tax evasion, procurement corruption, and financial misconduct within public institutions. Authorities emphasised that prosecuting offenders like Khoza helps protect South Africa’s fiscal stability and strengthens governance systems.

The conviction highlights the state’s “unswerving commitment” to holding accountable those who defraud taxpayers and manipulate government contracts for personal gain.