A 45-year-old tax practitioner in the Eastern Cape stands accused of running a tax fraud scheme that allegedly bilked the South African Revenue Service (SARS) out of more than R9.6 million. Francis Muleso faces serious criminal charges after investigators accused him of filing nil income tax returns while quietly concealing substantial business income over a four-year period.
The Hawks apprehended Muleso on Monday at the KuGompo City Magistrates’ Court, where he had made an appearance regarding a separate, unrelated matter involving similar allegations. Following his arrest, he appeared before the Mthatha Specialised Commercial Crimes Court, which granted him R50,000 bail.
How the Alleged R9.6 Million Tax Scheme Unfolded
The investigation centers on financial misconduct allegedly committed between March 2016 and March 2020. According to Eastern Cape Hawks spokesperson Warrant Officer Ndiphiwe Mhlakuvana, Muleso abused his professional position as a tax return practitioner to distort the financial reality of a local close corporation.
Investigators allege that Muleso regularly submitted zero-income tax returns on behalf of the entity, even though the business continued to generate taxable income. The deception ultimately unraveled when SARS detected suspicious financial irregularities during routine compliance checks and referred the case directly to the Hawks’ Serious Commercial Crime Investigation team stationed in Mthatha.
Subsequent forensic examinations of the close corporation’s banking records alongside its tax declarations exposed massive discrepancies, particularly within its value-added tax submissions. According to IOL, investigators found that output tax had been understated by more than R2.7 million, while input tax claims had been inflated by more than R6.1 million.
The resulting VAT irregularities generated a reported financial prejudice of R8,854,305.86 for the revenue service. When combined with the manipulated income tax liabilities, the total estimated loss to SARS surpasses the R9.6 million mark.
Court Postponement and Looming Arrests
During Muleso’s appearance at the Mthatha Specialised Commercial Crimes Court, the magistrate postponed the proceedings to January 18, 2027, allowing authorities time to finalize the contents of the case docket.
Law enforcement authorities have emphasized that the judicial process is only just beginning. The Hawks warned that further arrests remain imminent as investigators work to unravel whether Muleso operated alone or alongside co-conspirators within the corporate entity. Investigators have urged anyone possessing relevant information about the case to contact local authorities.
