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Tax ‘fraudster’ takes on SARS

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iol news pic s'bu and shauwn mpisane

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File picture: Businesswoman Shauwn Mpisane. Photo: Bongani Mbatha

A Durban low-cost housing construction company at the centre of fraud claims won a legal battle with the taxman in the High Court in Pretoria on Tuesday.

The court ruled that the SA Revenue Service (Sars) unlawfully cancelled the company's tax clearance certificate.

Judge Gregory Wright granted the order following an urgent application by millionaire businesswoman Shauwn Mpisane's business, Zikhulise Cleaning, Maintenance and Transport cc.

Wright ordered that, pending the outcome of a review application, the Sars decision to withdraw Zikhulise's tax clearance certificate for the year would be of no force and effect.

Mpisane and her business are to stand trial in the Durban Regional Court in June on charges of fraud and tax evasion.

Wright said the fact that Sars afforded Zikhulise an opportunity to make representations only after the decision had was made in March was not competent in law.

He said Sars exercised a public function and its decision affected Zikhulise, which was entitled to reasonable notice of the taxman's intention to recall the notice and to an opportunity to address Sars.

Etienne Coetzee SC, for Sars, argued that a ruling in favour of Zikhulise could affect tax clearance certificates and how they were handled.

He said it could affect the whole tendering and tax clearance certificate environment.

“You cannot allow taxpayers who owe billions to tender 1/8for government contracts 3/8 left, right and centre while they don't pay the fiscus... The tender industry has to be strictly controlled,” he said.

Mpisane, who is married to former metro policeman Sbu Mpisane, claimed in court papers she was the victim of a politically motivated campaign of victimisation aimed at destroying her and her businesses.

“... I verily believe that the decision taken by Sars to cancel Zikhulise's TCC (tax clearance certificate) was actuated by malice, alternatively was taken for an ulterior motive and was in bad faith,” said Mpisane.

“I am a businesswoman and I am involved in a number of businesses that are responsible for the construction of affordable housing in terms of government tenders.

“... I also have links to a number of well-known political personalities.

“... As matters currently stand, there is a dispute between Zikhulise and the Durban city municipality arising out of the cancellation of a contract to complete low-cost homes in Umlazi, south of Durban.

“In addition to this, Sars appears inexplicably to have turned its attention to Zikhulise, 1/8her other company 3/8 Ukhozi and myself.... The charges are frivolous and without substance,” she said.

She also accused Sars of unlawfully trying to interfere in Zikhulise's business with the eThekwini Municipality, which she claimed owed her company R17 million.

Sars anti-corruption investigator Yegandren Mundie said in an affidavit the tax clearance certificate should never have been issued.

He said the tax official who issued it had acted recklessly or negligently and Sars had already instituted disciplinary proceedings against her.

Mundie said Mpisane and Zikhulise had been arraigned in June on various charges of fraud, alternatively forgery or tax evasion relating to the 2008 and 2010 financial years.

Zikhulise had submitted a revised income tax return for 2008 in which the company's taxable earnings were reduced, but which were supported by what turned out to be fictitious tax invoices which lowered its taxable income by about R16m.

It also under-declared its taxable supplies by over R4.7m for the 2010 financial year, he said.

He said Mpisane's allegations that the criminal charges against her were “frivolous” were incomprehensible, as the business's erstwhile bookkeeper had pleaded guilty to offences similar to those of which she was now accused.

Mundie said Ukhozi's tax affairs were also not in order and it was undisputed that it owned the fiscus in the region of R12m.

Ukhozi had since launched an application to hold Mpisane personally liable for its tax debits.

Mudie said Mpisane had failed to disclose that certain of Zikhulise's government contracts had been cancelled by the eThikwini municipality and that payment had been suspended as a result of this litigation. - Sapa


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