Authored by: Jerry Botha, Managing Partner at Tax Consulting SA & Jean du Toit, Senior Attorney at Tax Consulting SA
The arrival of Angelo Agrizzi at the State Capture Commission has been nothing short of spectacular.
The testimony of the former Bosasa Chief Operating Officer implicates a horde of people in several corruption scandals that have long been suspected, and then some.
We now have a smoking gun and the nation’s gaze turns to the National Prosecuting Authority (NPA), to see if it will capatilise on Agrizzi’s birdsong.
The public wants to know, will someone finally end up behind bars now?
The truth is that, even with Agrizzi’s evidence, damning as it may be, an outright conviction on criminal charges such as corruption, bribery or fraud is, at this stage, improbable.
The state’s onerous burden of proof, the complexity of these crimes and the resources required to investigate them are but a few factors that mean that it can take the NPA years to build a robust case.Even then, a conviction is by no means guaranteed.
If some media reports are to be believed, they have been sitting on matters for 10 years, so it does not take too much imagination to see that they will rather have the perpetrators die of old age, before letting them have a day in court.
SARS, on the other hand, has made clear its intentions when it announced that it will investigate Agrizzi’s allegations insofar as they relate to tax evasion (Read full statement here)
“SARS is concerned that names of some former employees have been mentioned in alleged wrongdoing and would like to assure the South African taxpayers and public that these will be investigated without fear or favour and guilty persons will be brought to book.”
Hopefully, the NPA has taken notice of SARS’ interest. It would not be a bad idea at all for the NPA just be to hitch its wagon to SARS’ star.
Lest anyone forget, Al Capone, one of the most publicised racketeers of the twentieth century, was not convicted for his most notorious crimes, but for tax evasion.
Federal prosecutors worked for years to build a case against Capone but could never gather enough evidence to get a conviction. Capone was eventually convicted for tax evasion and the rest is history in prison.
Tax evasion is a more attainable conviction because proving the elements of the crime is duck soup when compared to, for instance, corruption.
Tax evasion, in very simple terms, requires that there was a receipt of anything with an ascertainable money value that was not disclosed to SARS. It is a crime that does not concern itself with the legality of the receipt, the purpose thereof, by whom it was paid or what it was used for.
It simply asks, was it taxed? We may be guessing, but it is unlikely that any of the “payments” made were disclosed by Bosasa or their recipients.
The new NDPP, Shamila Bathohi should consider when she takes office next week, to go visit Mark Kingon, the current acting Commissioner at SARS.
His investigators are presumably already having a look at where these payments are shown in the books, adding back the numbers and raising PAYE assessments plus 200% penalties. Where the NDPP follows the money, early convictions for tax evasion will give her much needed quick successes.
That is not to say that the NPA should not eventually pursue other, perhaps more serious, charges. In fact, this will give the NPA time to build an unassailable case on other charges in the meantime.
This strategy ensures for a slam-dunk upfront and it is quite possible that it may lead others to join Agrizzi’s choir once they have been pinned on tax evasion, to strike a deal that may lead to the bigger fish ending up behind bars.
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