Stand by for the most recent instalment within the unparalleled narrative of the Zondo Fee’s most spectacular search for, inclined Bosasa COO Angelo Agrizzi. The one who captured the public’s attention with a riveting testimony to SA’s professional investigation into relate dangle, is now being sued by the taxman for larger than R230m. Agrizzi says that is powerful beyond his now meagre asset contaminated. The doyen of SA’s investigative journalists, Martin Welz, spent hours poring over court docket papers to salvage to the backside of a case SARS wants saved in camera (i.e. secret) but Agrizzi says it must be heard in public domain. Here is the inimitable Welz’s comprehensive file on the most recent chapter within the Bosasa saga. – Alec Hogg
By Martin Welz*
From sworn statements filed on the Pretoria High Court docket closing week, it emerges that the Hawks were no longer the undoubtedly relate company in a bustle to “punish” Bosasa whistleblower Angelo Agrizzi for talking out on the Zondo Fee.
Introduced on by his proof earlier than the Zondo Fee, the South African Earnings Carrier, too, were in sizzling pursuit of Angelo Agrizzi and his fellow whistleblowers.
With his Zondo proof in hand, SARS out of the blue embarked on a prime re-review of Agrizzi’s tax returns dating from as a long way relief as 2006. This culminated in them presenting him in December closing yr with a gigantic R230m tax bill, which used to be due for price on 31 March this yr.
He has lodged a proper objection to the evaluation and denies owing the volume claimed, or any quantity at all.
Readers will engage that the Hawks arrested Agrizzi the day after he concluded the first round of his huge proof to the Zondo Fee in February 2019. (He used to be launched on R30,000 bail.)
Angelo Agrizzi had been chief operations officer of the Bosasa crew of firms headed by Gavin Watson, senior member of the Eastern Cape household that has been famously and controversially aligned with the ANC for the reason that apartheid years.
Of their proof to Zondo, Agrizzi and a few fellow whistleblowers had fingered several influential ANC politicians and senior authorities officers – inter alia, a senior tax professional – for having permitted bribes in money or kind worth tens of millions from the corporate.
Agrizzi testified that these bribed were anticipated to favour the Bosasa firms with authorities contracts, aid solve their tax concerns and, if need be, protect the Bosasa directors from prosecution.
Within the High Court docket application launched in Pretoria closing week, SARS is the applicant; Angelo Agrizzi and his well-known other Deborah are the respondents.
The founding affidavit in toughen of the SARS court docket application used to be made by Pieter Engelbrecht, Coast Lead: Illicit Financial system Unit basically basically basically based at SARS’ offices in Nieuw Muckleneuk, Pretoria.
First off, SARS wants the court docket application to be heard in camera (secretly and tiring closed doorways), “because the applying incorporates confidential taxpayer recordsdata, which (by strategy of the Tax Administration Act) mustn’t ever be disclosed and can also honest no longer be birth to public scrutiny”.
Agrizzi’s response in his answering affidavit: “I oppose an in camera hearing. The topic is within the final public hobby. I even beget nothing to conceal, and beget beforehand on the Zondo Commission revealed my earnings and monetary recordsdata for all to gawk. Furthermore, the NPA beget already taken the freedom to publicly field out tiny print of my monetary affairs.”
The most main aim of SARS’ application is to bask in a court docket narrate obliging the Agrizzis to realise and repatriate the money proceeds of their international sources (a farmhouse and monetary institution accounts in Italy) to South Africa. SARS values these international sources is has been ready to name at R33m – sufficient to establish 14% of the tax quantity they are claiming.
Agrizzi’s South African sources are estimated by SARS to be worth merely sufficient to establish one per cent of the alleged R230m tax debt.
Here’s rapid explained by reference to appropriate two paragraphs taken from the proof widely summarised within the court docket papers:
From Agrizzi’s 2016 assertion of sources and liabilities SARS gathered, inter alia, that he had within the within the period in-between owned 5 luxurious motor automobiles:
- a BMW SUV valued at R1.9m;
- a Ferrari 488 GTB valued at R6.5m;
- a BMW 750 valued at R2.5m;
- a Ferrari F12 valued at R6.3m and
- a Ferrari 360 Modena valued at R1.8m.
However, a newest search performed by SARS on e-Natis lists no automobiles currently registered in Agrizzi’s name.
In response, Agrizzi confirms they were sold in 2018 to enhance money.
He then transferred R10 million for investment in one more country in November 2018. His well-known other did likewise in January 2019. In addition, they both transferred their legally permitted plod back and forth allowances of R1 million per yr. All these transfers, he states, were performed having received the required clearance from SARS and the permission of the SA Reserve Financial institution. His investment quantity has been invested in a farmhouse in Tuscany – which operates a B&B – and a motorized vehicle. His well-known other’s investment allowance is gentle held in an Italian checking fable.
Engelbrecht confirms in his founding affidavit: “The testimonies earlier than the Zondo Fee, including that of Agrizzi, revealed a blinding-scale design of fraud, money laundering, racketeering and tax evasion working into millions of rand, perpetrated by diversified persons within the African Global Holdings Neighborhood (beforehand is called the Bosasa Neighborhood).”
SARS had closely monitored the Bosasa whistleblower’s proof and had bought a duplicate of the commission investigator’s 700-online page file.
A formal tax enquiry used to be convened in 2019. Agrizzi used to be called to testify on the enquiry in August of that yr. (Within the early hours of 26 August, Bosasa kingpin Gavin Watson used to be stumbled on wearisome in a automobile ruin near Johannesburg airport. Many suspect he used to be murdered in totally different locations and the accident used to be staged. He had been scheduled to testify on the SARS enquiry the subsequent day.)
For the length of its investigation, SARS bought salvage admission to to the total records of Agrizzi’s eight monetary institution and bank card accounts held at four main banks. They bought a file of all his offshore monetary transactions from the NPA and the SA Reserve Financial institution. And that they had behold of the recordsdata bought by the NPA from the Italian authorities, which had salvage admission to to the Agrizzis’ Italian monetary institution accounts and stuck property records.
In December closing yr, SARS informed him that it had concluded he owes earnings tax amounting to R83m, plus penalties of R137m and R8m in hobby.
The Agrizzis are opposing the court docket application for the repatriation of their Italian sources, and snort he owes outstanding tax within the volume alleged or at all.
Agrizzi has been contesting the assessments over the previous yr and his attorneys and tax advisers beget, some time within the past, filed a proper objection to the assessments. These objection proceedings are gentle pending.
In cease, SARS is attempting to implement the so-called ‘pay now, argue later’ tax rule but Agrizzi argues, on several grounds, that he’ll be caused irreparable disaster must the court docket grant the narrate sought by SARS, and it subsequently be stumbled on that SARS’ tax claims are spurious.
“Regardless of my comprehensive objections, SARS insists that I merely pay the disputed tax – all R230m of it – out of the blue. SARS has even gone to the intense lengths of applying for an narrate beneath the apparently no longer commonly broken-down Allotment 186(2) of the Tax Administration Act, forcing me to sell a property and other sources in Italy, and repatriate the proceeds to pay the disputed tax,” he pronounces in an answering affidavit.
“All of this, no topic it being a long way from established that I surely owe the disputed tax.”
The Tax Administration Act permits a properly designated senior SARS professional to slump price of tax on application. Agrizzi applied for a suspension but SARS refused the applying; a resolution, he argues, that used to be “unlawful, irrational and unreasonable”. He has applied to the court docket to analyze this resolution.
Agrizzi also argues in his answering papers that in any tournament, he can not sell his Italian sources and repatriate the proceeds as these sources were ceded to the National Prosecuting Authority in lieu of bail to stable his release when he used to be arrested (for the 2nd time) in October 2019 on new charges related to his later Zondo proof.
“As part of my bail cases, I used to be required to ‘give up the distinctive property deed of [the property in Italy] … to Lt Col. Lazarus of the Investigating Directorate, Corruption’. I am accordingly unable to alienate the property in Italy.”
(For the file: the cession of R33m worth of international sources to stable bail in a criminal topic makes it presumably the easiest bail identify ever situation by a South African court docket.)
SARS concedes in its court docket application that South Africa has no tax treaty with Italy that can enable it to secure tax there. However, the Tax Administration Act permits the court docket to narrate the taxpayer to repatriate his offshore sources in narrate to satisfy the tax debt.
SARS first issued him with a ‘request of audit’ on 21 July 2020. But from 14 October 2020 to 7 December 2020, he used to be in clinic in intensive care, powerful of the time in a coma. (“I am of the glimpse that I used to be poisoned as retribution for my testimony on the Zondo Fee,” he says in his court docket assertion.) Consequently, he used to be unable to abet to any suitable affairs, including the objection proceedings and SARS’ strive to repatriate his sources.
On the identical day he used to be launched from clinic, SARS issued its ‘letter of audit findings’. Extra assessments were raised in March this yr.
On 13 August Agrizzi’s tax consultants filed his formal objections – 1,251 pages of them – to SARS’ revised assessments for the tax intervals 2006 to 2019.
The tax assessments, Agrizzi’s consultants stumbled on, overstate his earnings because SARS had erroneously treated hundreds of monetary institution deposits as undeclared earnings when they were no longer truly received as earnings. Some of the hundreds of examples he quotes in his newest answering affidavit:
# “[SARS treated as taxable income] inter-fable transfers made by me between [bank] accounts beneath my regulate, including payments into bank card accounts amounting to over R69 million. [A SARS search found that he has six bank accounts at four banks and three credit card accounts.]
# “my Bosasa wage, which I had declared within the related tax returns every yr, used to be integrated to be taxed a 2nd time amounting to R1.3 million;
# “payments of dividends that were already field to withholding tax, amounting to R1.8 million;
# “repayments of loans that I improved to varied contributors and repayment of shareholder loans amounting to approximately R16.7 million.”
If the total listing is totalled up – and can also honest or no longer it’s stumbled on to be suitable – Agrizzi would appear to owe SARS totally R64,778.48.
He argues: “The method in which more good, convenient and suitable near is for price of the disputed tax to be held in abeyance pending the objection assignment and any additional appeals.”
He also notes: “The objection assignment has price me approximately R2 million to this point.” Extra in his affidavit he suggests: “SARS must contend with the objections and suitable its unsuitable calculations as a replace of applying draconian measures like an asset repatriation narrate.”
In other areas in his affidavit he pronounces: “SARS is unable to produce suitable and substantiated figures. This helps an affordable inference that the the clarification why SARS will no longer take care of the objection is for the reason that info contained within the objection clearly present an agenda and story that SARS harbours in opposition to me.”
SARS has yet to answer to the objections. Closing week, SARS’ attorneys instructed Agrizzi that SARS will almost certainly be ready to answer to his objections totally on 22 February next yr.
A date is also yet to be situation for the hearing of SARS’ High Court docket application with regard to the repatriation of the Agrizzis’ Italian sources.
Ever heard the phrase, ‘No correct deed goes unpunished’, Mr Agrizzi? In accordance to Wikipedia, it’s a sardonic commentary on the frequency with which acts of kindness – doing the honest thing, must you adore – backfire on these that enact them.
FOOTNOTE: In March closing yr, SARS efficiently adverse a court docket elaborate by Watson household participants to beget about a of the Bosasa firms positioned beneath industry rescue, comparatively than be set into liquidation. The crew of firms are now in liquidation. In its court docket papers, SARS revealed its investigations into the crew of firms had concluded that it owed SARS R849 million in tax and penalties on undisclosed earnings.
SARS senior investigator Pieter Engelbrecht reported that, throughout a tax enquiry held in 2019, “SARS’ life like belief that firms within the Bosasa crew had didn’t conform with their tasks and committed offences by strategy of the tax acts, or had disposed of, or concealed sources, which will be broken-correct down to satisfy a wonderful tax debt, used to be confirmed in all materials substances.”
- Stellenbosch and Pretoria University trained Martin Welz (76) has dedicated his lifestyles to exposing malfeasance and abuse by the rich and highly effective, infrequently ending up in court docket as a result of his disclosures. After a long time of manufacturing award-a success exposé‘s for main newspapers, Welz founded Noseweek in June 1993.
Read more:
- Superb of 2019: Bosasa Info – Gavin Watson’s defence: Timeline and documentary proof
- Jared Watson: How Agrizzi and Van Tonder stole from Bosasa
- The Editor’s Desk: The Guptas, Angelo Agrizzi, and Iqbal Survé
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