What SPAR's VAT Saga Teaches Every Accountant
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Note: the claims below are disputed and still being reviewed by regulators. Nothing has been proven. We cover it for the lessons it holds for accountants.
A report was meant to help one businessman decide whether to buy a single liquor store. Instead, it has dragged a JSE-listed giant into a tax fraud row. The interesting part for accountants is how the problem came to light.
What the report says
Business Explainer, citing Business Day, reports the following. A BDO report from September 2025 was ordered by a businessman, Amaan Sayed. He was thinking of buying SPAR's company-owned Bloed Street Tops store in Pretoria. The report raised three red flags:
The financial information looked unreliable and did not match the reported figures.
The gross profit looked too high for the actual stock and sales.
The store had under-declared its output VAT and over-declared its input VAT. If correct, this would have resulted in SARS receiving less VAT than was due and could amount to a breach of the VAT Act.
The report also said stock prices were manipulated and stock was rolled over to hide losses.
Sayed has now complained to the JSE, SAICA and the CIPC. His complaints name SPAR chair Mike Bosman, who is a chartered accountant. They claim a faulty stock formula was used across several company-owned SPAR and Tops stores, and that the problem goes wider than the one store BDO checked. Sayed wants the CIPC to declare Bosman a delinquent director.
SPAR disputes the broader allegations. The group says its own internal review found no reportable problems. It says the BDO report covers just one store. It says Sayed only complained because his offer to buy the store was turned down.
What it did to the share price
The timing is bad for SPAR. In late May, the group warned that headline earnings would fall by 50 to 60 per cent for the 26 weeks to 27 March 2026. The share dropped 16 per cent in one day. That followed a rough year:
In February 2026, the share price fell to levels not seen in more than a decade.
It lost more than half its value in a year, the worst of South Africa's big food retailers.
The group posted a R5 billion loss for 2025 and paid no dividends.
The CEO later resigned during a period of continued share-price pressure.
At the AGM, 61 per cent of shareholders voted against the pay policy.
So the company was already weak. To be clear, the VAT claims did not cause these falls. Earnings and governance did. But the VAT claims add fresh regulatory and reputational risk to a share price with nothing left to absorb it.
The lessons for you
Reconciliation is your early warning system.
The pattern here, output understated and input overstated, is exactly what a VAT reconciliation is built to catch. You compare the VAT201 to the income statement, and the gaps show up. Our guide on why VAT reconciliation doesn't have to hurt covers the checks every retail and wholesale client needs.
Your independence is the product.
An outside report saw what the internal review reportedly missed. When you do due diligence on a deal, inflated gross profit and rolled-over stock are the first places to dig.
Your title travels with the work.
The complaint targets a chartered accountant in his governance role, not just the company. Regulators draw a hard line between an honest mistake and deliberate fraud, and so does your professional body. See the wake-up call for tax practitioners.
SARS is hunting this exact pattern.
The revenue service collected R301.5 billion in compliance revenue in 2024/25, up almost 16 per cent. VAT compliance remains a major SARS enforcement focus. VAT is self-assessed, so it is easy to abuse. Clean, reconciled books are now a defence, not a nice-to-have.
Here is your value in one line. You are the person who spots the hole before SARS, a buyer, or a journalist does.