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News & Press: Case Law

Malema’s business partner drops tax fight

14 August 2012   (0 Comments)
Posted by: SAIT Technical
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By Xolani Mbanjwa (City Press/News24)

Johannesburg - The North Gauteng High Court has ordered Lesiba Gwangwa, a business partner of the embattled former ANC Youth League leader Julius Malema, to make himself available for questioning at a crucial inquiry into his tax affairs on Tuesday.

Gwangwa, 32, had approached the High Court to set aside the inquiry into 18 of his companies, some in which Malema still has a stake through the Ratanang Family Trust.

Malema resigned as director of these companies, but still benefits from On-Point through his Ratanang Family Trust's shareholding in the company.

He withdrew the two court applications to set aside the inquiry on Tuesday but did not give reasons for doing so.

Gwangwa wanted the inquiry, which is probing 15 suspected breaches of the VAT Act and Income Tax Act by Gwangwa and his companies since 2005, to be set aside and had argued that the probe was, among others, unconstitutional.

It took Judge Ferdi Preller by surprise when Gwangwa's lawyers informed him on Tuesday that their client had settled the matter out of court and had agreed to testify at the inquiry by the South African Revenue Service.

"I didn't think this matter was capable of being settled. The order is made that he will testify and appear on Tuesday. So Advocate [Piet] Marais can continue with his inquiry,” said Preller.

Marais was one of the three respondents named by Gwangwa in his urgent application. Others included Gwangwa's former accountant Seraj Ravat and the Sars commissioner.

‘Frustrate the Sars investigation'

Sars attorney Nic Maritz SC told City Press that Gwangwa did not give any reasons for withdrawing his application, which the taxman was opposing as merely an "attempt to delay or frustrate the Sars investigation and specifically an attempt to prevent Sars in carrying out its duties”.

Gwangwa has been fighting the taxman since May this year when he first approached the High Court to have the inquiry set aside, based on the refusal by Marais, the presiding officer in the Sars inquiry, to provide him with a copy of Ravat's testimony and Gwangwa's exclusion from Ravat's testimony.

During his testimony in April, Ravat told Marais that he had received threatening telephone calls and that if he continued to testify in the presence of Gwangwa he would not feel safe and he would not be "frank” in his testimony.

This prompted Marais to instruct Gwangwa and his legal team to leave the inquiry until Ravat had completed his testimony, which angered Gwangwa.

In its opposing affidavit, Sars senior manager in tax and customs enforcement investigations Pieter Engelbrecht, contended that Gwangwa had a strong case to answer.

The charges include tax evasion.

Engelbrecht had contended in court papers that Gwangwa's application was not urgent and that Gwangwa was not entitled to a copy of Ravat's testimony.

"Simply put [Gwangwa] is non-compliant. The investigation is necessary and has already yielded results and the applicant is attempting to frustrate Sars in its investigation by relying on vague and unsubstantiated allegations,” said Engelbrecht.

Attempts to reach Gwangwa were unsuccessful.


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