SCA favours SARS in Christo Wiese challenge
SARS has won the second round of its long-running legal bid to get businessman Christo Wiese and three colleagues to pay R216m it says they owe in taxes, reports Fin24.
SARS has accused Energy Africa – owned by Wiese's Titan Group – of ‘dissipating’ its assets to obstruct the collection of a tax debt.
According to SARS, Wiese and colleagues paid out a loan claim of R216m as a special dividend over a decade ago when they should have known that Energy Africa owed the money to SARS.
Wiese's co-defendants are Isak Visagie, Gert Viljoen and Frederik Hofmeyr.
SARS won the first round of the case in November 2022, when the Western Cape High Court ruled on two points of law that will play a vital role when the case goes to trial.
The first was whether a tax debt can be said to exist even if SARS has not yet issued an official assessment. The High Court found that such a debt could be said to exist.
The second point was whether a transcript of evidence from a tax inquiry held in 2015 and 2016 could be admitted to trial. Again, the court ruled for SARS, finding that it could be presented.
Both rulings strengthened SARS' case against Wiese and the others.
But before the case could proceed to trial, they took both rulings on appeal to the SCA.
According to Fin24, the SCA has now dismissed the appeal with costs, including the costs of two counsel.
‘A tax debt exists, irrespective of the absence of an assessment of the tax debt,’ the court found in a unanimous ruling. It added that the transcript of the evidence given at the tax inquiry was also admissible in the litigation between the parties.
Lawyers for Wiese and his co-defendants had argued that the transcript should not be part of the trial, as tax legislation states that evidence procured in a private tax inquiry cannot be used in subsequent civil proceedings.
But the court ruled against this reading of the tax Act, saying it would bind SARS' hands.
‘The evidence obtained ... serves a legitimate purpose, which is to enable SARS to execute its statutory duty ... to recover tax debts due to the fiscus,’ it said.
The report notes the ruling does not mean that Wiese, Visagie, Viljoen and Hofmeyr need to pay the tax debt.
Rather, it sets the stage for what issues will be argued when the case finally comes to trial.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
