Top ANC politicians, officials and prominent businessmen who benefited from Bosasa's dodgy dealings are facing tax claims of more than R250m from the South African Revenue Service (Sars).
In a first, dramatic move to deal with individuals implicated at the Zondo inquiry into state capture, the tax authority has concluded preliminary investigations that are likely to result in individuals not only being served with hefty bills, but also charged for under-declaration of income, overstated expenses and misrepresentations to Sars. Eighty-three taxpayers are being probed.
Those on the Sars hit list include: environmental affairs minister Nomvula Mokonyane, ANC MP Vincent Smith, former SAA and current Jacob Zuma Foundation chair Dudu Myeni, the Jacob Zuma Foundation, of which Zuma is patron, former prisons boss Linda Mti, dismissed former National Prosecuting Authority prosecutors Nomgcobo Jiba and Lawrence Mrwebi, and former correctional services commissioner Zack Modise.
A report by the unit dealing with illicit-economy case selection and tactical research analysis, prepared last month, is with Sars's group executive for criminal investigations. It states that its aim is to restore tax morality and ultimately attract more foreign investment.
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It stresses that "very few people" implicated in state capture have been prosecuted or have had their assets attached.Sars has set up a team of six investigators and three tax specialists to work on the Bosasa case."The matter is urgent, as there is a perception in the country that there are no consequences for looting state resources. Some taxpayers are reluctant to pay their fair share to the fiscus because of looting of public funds. Taking action against perpetrators will help change taxpayers' mindset, resulting in increased revenue for the state," the report states.Others being investigated by Sars include former SABC boss Hlaudi Motsoeneng, attorney Christo van Wyk, Armscor CEO Kevin Wakeford, former Sars consultant George Papadakis and former correctional services CFO Patrick Gillingham."The project will have a positive spin-off for the country, resulting in increasing foreign direct investment," the report says.A Sars official said they were not obliged to inform those they are investigating at this stage.
Affidavits presented to the Zondo commission state that Bosasa siphoned off cash from the business to bribe politicians and government officials to secure lucrative tenders and secure protection from prosecution.
During their testimony at the Zondo commission, former Bosasa officials, including former chief operations officer Angelo Agrizzi, testified that security fixtures had been installed at the homes of government officials and politicians including Smith, Mokonyane, mineral resources minister Gwede Mantashe (who at the time was ANC secretary-general) and Myeni. Agrizzi is also on Sars's list.
Agrizzi, in his affidavit, said Bosasa CEO Gavin Watson paid Myeni R300,000 a month in cash for "onward payments to the Jacob Zuma Foundation".
He also testified that Mokonyane had received Christmas groceries as gifts from Bosasa for years. These included, among other things, 120 cases of cold drinks, 40 cases of beer, four cases of quality whisky, 12 cases of frozen chickens, 200kg of beef braai packs, eight lambs, and cases of premium brandy and other speciality alcohols.
He testified that 38 government officials were on Bosasa's payroll and that the company received nearly R2.6bn in revenue from government contracts with state and provincial departments between 2000 and 2016. He said the company paid R75m annually in bribes to secure these tenders.
Of the R75m in bribes, R40m went to the departments of justice and correctional services to secure tenders.
Initial calculations indicate that Mokonyane may be liable for R924,000, Mti for R1m, Jiba for R2.3m, Mrwebi for R235,200, Mantashe for R84,000, Smith for R56,000, Myeni/Jacob Zuma Foundation for R1m, Wakeford for R1.68m and Motsoeneng for R332,543, according to Sars.
Other entities were also allegedly used as conduits to siphon funds from the Bosasa group of companies by issuing fraudulent tax invoices for transactions that never took place.
A source with intimate knowledge of the investigation said he first met with Sars in 2015 and then again shortly before Agrizzi testified last year before the Zondo inquiry.
The source said the whistle-blower and others met again with Sars earlier this year after Sars attorneys approached them in February.
"The whistle-blower met a special team consisting of investigators and Sars lawyers who have been assembled to probe allegations coming from the Zondo commission.
"The investigators and lawyers were provided with documents and information including the methodology on how the alleged money-laundering occurred, which was through various trust funds both in SA and [English Channel tax haven] Guernsey, and through properties which were built through Bosasa, which the company allegedly claimed back tax on."
The source said Sars investigators were looking at working with their international counterparts to try to track down and recover money that had been sent overseas.
"The money that has gone out of the country is in the millions. It's not pocket change, that's for sure," said the source.
Sars spokesperson Sandile Memela yesterday said the tax authority is not in a position to divulge specific taxpayers' details.
Corruption busters and political analysts, however, have welcomed the investigations.
Political analyst Ralph Mathekga said Sars had taken a bold step in principle, and political will was needed to see through the process, which should result in prosecutions.
"When we look at the ANC position on corruption, we see divisions in the party and it will be interesting to see consistency," said Mathekga.
He said those implicated will obviously try to fight back because their livelihoods will be affected as the tax authority will obviously gun for everything they own.
David Lewis of Corruption Watch said: "We have said all along the reason Sars had to be captured by the previous administration was because so many of these corrupt individuals and entities were vulnerable to prosecution for tax-related charges.
"This is exactly what Sars should be going for. It's the Al Capone story where, if you cannot get these people on crimes such as money-laundering, you go after them on tax-related crimes."
Keith Engel, CEO of the South African Institute of Tax Professionals, said South African case law holds that if you receive money as income, regardless of what the source is - including if it is a bribe - then Sars can tax it.
"To prove a crime requires intention to be shown and factual evidence, but under tax administration laws all Sars needs to show are money flows. If they can show these money flows then they can claim the tax.
"Sars needs to be congratulated for this investigation. It shows they are not taking nonsense and will go after all and sundry involved in tax evasion."
Bosasa chair Johannes Gumede said he knew nothing about the matter. "Go speak to Sars if you want to know more," he said.
Bosasa and Watson's lawyer Brian Biebuyck said he had no knowledge of the issues and was not able to comment. Watson failed to respond to WhatsApp questions or calls. Agrizzi declined to comment.
Mokonyane's spokesperson, Mlimandlela Ndamase, said the minister is not aware of any Sars investigations and she has previously stated that she intends to exercise her rights in line with the rules of the Zondo commission to either cross-examine, call witnesses or testify in response to allegations made against her at the commission.
Mrwebi said he has not been approached by Sars and knows nothing of the investigation. "I have before, and still do, vehemently dispute allegations that I was bribed. I have never met these people," he said.
Former deputy director of public prosecutions Jiba failed to respond to questions.
Motsoeneng said he was not aware of any Sars investigation and said he could not comment on the matter.
In March, Bosasa's tax consultant, Peet Venter told the Zondo inquiry that Watson approached him to help with Motsoeneng's legal costs.
Venter said he made the payment in two instalments via the shelf company Miotto Trading. The first instalment was for about R600,000 and the second about R587,000. - Additional reporting by Graeme Hosken..