Zuma faces tax evasion charges

SARS and Zuma tax returns

As the National Prosecuting Authority was revealing in papers submitted to the Constitutional Court how ANC president Jacob Zuma allegedly failed to declare his income to the taxman, the SA Revenue Service (SARS) yesterday was keeping mum.
Responding to a set of written questions submitted by Sapa on the NPA’s allegation, SARS said: “The confidentiality provisions contained in tax legislation, in particular section 4 of the Income Tax Act for the purpose of this inquiry, prohibit SARS from publicly disclosing details pertaining to the tax affairs of particular taxpayers.”

According to the indictment filed in the Pietermaritzburg High Court on December 28, 2007, Zuma failed to submit tax returns for nine years from 1995 to 2003.

In papers filed on Thursday by the NPA in the Constitutional Court - where Zuma is attempting to challenge controversial August 2005 search and seizure raids - it is alleged that he “failed to disclose” to SARS or Parliament that he received 583 payments from convicted fraudster Schabir Shaik.

It also alleges that he failed to declare taxable income of R2.7 million and evaded tax of R1.6 million.

SARS said it could not say when it had become aware of the alleged failure to submit tax returns, or what action it took to get Zuma to submit his tax returns.

SARS said the legislation meant it could also not disclose whether Zuma was subject to an investigation by SARS prior to the NPA investigating his tax affairs. SARS could not disclose whether any of its investigators were working with the NPA and it would not say whether it had investigated Shaik for any irregularities.

However, if Zuma should be found guilty of contravening any tax legislation, apart from the headlines it would create, he could find his name in advertisements which SARS uses to “name and shame” defaulters.

“In the past SARS has placed advertisements in the media which contained the names of tax defaulters who have been found guilty in a court of law.

'Zuma’s tax payment doesn’t clear him’

ANC president Jacob Zuma’s recent settlement with the South African Revenue Service (Sars) does not necessarily clear him "after years of delinquency", the National Prosecuting Authority said in papers today.

The NPA’s answering affidavit was lodged with the Pietermaritzburg High Court in response to Zuma’s application to have its decision to prosecute him declared unconstitutional.

In the answering affidavit, senior investigator at the Directorate of Special Operations (DSO), Johan du Plooy wrote: "I observe that the ’regularisation’ of his tax affairs after years of delinquency does not exculpate him any more than a thief who repays the stolen money, or a shop-lifter who attempts to replace the stolen goods on the shelf after he is caught."

Du Plooy pointed out that Zuma had settled with SARS "after his indictment on the present charges".

Zuma claimed his settlement with SARS was "reached without any admission of criminal conduct on my part and on the basis that it disposes of and resolves all liability in respect of the said tax issues -- both criminal and civil liability".

Zuma said that the NPA should have been aware of his discussions with SARS representatives since it had been "prying" into his financial affairs "and indeed resorted to spying on me using intelligence gathering methods not authorised by any competent body".

Du Plooy rejected the spying allegations, saying that "we were unaware of any impending settlement of his outstanding taxes. This appears to have been a recent development".

He said that the NPA had not received a copy of an agreement or proof of payment.

Referring to the decision to try Zuma, Du Plooy said: "I submit that the most pressing interest involved is to have the guilt or innocence of a person who aspires to the highest office of the land definitively determined in a court of law. The granting of this application would only serve to delay this end."

Zuma’s application is expected to be heard in the Pietermaritzburg High Court on August 4 and 5.

Zuma contends that the decision to prosecute him, announced shortly after the ANC’s national conference in Polokwane in December 2007, constituted a review and reversal of a 2003 decision not to do so.

He said he had not been given the opportunity to make representations as to whether the 2003 decision should be reviewed.

"This is a clear and, I submit, conscious and deliberate negation of the constitutional requisites of calling for representations, considering these if provided and then making an informed decision whether to reverse the earlier decision and institute a prosecution or not."

Du Plooy said Zuma was not "entitled to make representations before being charged. The prosecution imperative remains, namely to prosecute without fear, favour or prejudice," he said.

Zuma faces 16 charges in total -- one count of racketeering, two counts of corruption, one count of money laundering and 12 counts of fraud.

The two South African subsidiaries of Thales International (formerly Thomson-CFS) -- Thint Holding (Southern Africa) Pty Ltd and Thint (Pty) Ltd - are co-accused and each face a charge of racketeering and two counts of corruption.

On June 30 the Mauritius Supreme Court rejected Zuma’s application to be involved in a case about documents that could be used as evidence against him by the NPA.