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Mpisane tax records ‘not privileged’

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IOL NS MPISANE 1

Independent Newspapers

File image: Shauwn Mpisane outside the Pinetown Magistrates Court. Picture: Jaques Naude

Durban - A chartered accountant who handled the tax affairs of fraud accused Shauwn Mpisane, testified that he was not advised of the repercussions of handing over invoices to Sars.

Trevor Dalton, who attended a consultation with Sars in 2010 to discuss an alternative dispute resolution, told the Durban Regional Court on Wednesday that he did not surrender any of Mpisane’s rights.

Dalton testified in a trial-within-a-trial, which began this week, challenging the admissibility of key evidence to be used by the State against Mpisane, who is accused of tax fraud.

Mpisane and her company, Zikhulise Cleaning and Transport, face 119 counts for allegedly defrauding Sars of R4.7 million by inflating invoices and contravening the Close Corporations Act.

She pleaded not guilty to all counts.

During cross examination by advocate Jimmy Howse, Dalton said all parties at the meeting were in agreement that financial statements would be handed to Sars for verification.

“I understood that whatever procedures Sars deemed necessary would be done,” Dalton said.

He said he had no knowledge that the invoices were forged, nor did he know that handing them over would prejudice his client.

Earlier, Howse continued to argue over provisions in the Income Tax Act, saying invoices used in alternative dispute resolution (ADR) proceedings could not be used in any subsequent matter.

During cross examination of Dierdre Pieterse, the revenue service’s senior manager for ADR, Howse said the provisions in the act were “sloppy”.

Pieterse disagreed.

“It attacks the integrity of Sars if documents that are provided in an ADR procedure, are deemed privileged,” she said.

“It’s never anticipated in the ADR process that subsequent proceedings will be criminal proceedings. Usually subsequent proceedings refer to the tax court.”

Pieterse maintained that the 148 invoices in question formed part of accounting records which are not subject to privilege.

The matter continues on Thursday. - Daily News


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