State: Mpisane invoices not privileged

2012-11-23 20:03
Shauwn and S'bu Mpisane (Picture: City Press)

Shauwn and S'bu Mpisane (Picture: City Press)

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Durban - Businesswoman Shauwn Mpisane cannot claim privilege over invoices she submitted in a tax dispute resolution process (ADR), the Durban Regional Court heard on Friday.

"It is contended that invoices were required by the SA Revenue Services before the ADR, therefore it cannot be contended that documents formed part of the ADR," prosecutor Meera Naidu said.

Mpisane is accused of inflating invoices by more than R5m to cut her tax bill.

She is also accused of violating the Close Corporation Act by remaining the sole member of the Zikhulise Cleaning, Maintenance, and Transport CC when she had a fraud conviction.

She has pleaded not guilty.

The court is holding a trial-within-a-trial to determine the admissibility of evidence submitted by the State.

The State has submitted 148 invoices it obtained from Mpisane during the ADR process.

The ADR process was established to encourage taxpayers to settle any disputes they might have with Sars. According to Sars legislation any information provided during the ADR process is confidential.

Naidu said the ADR process was not drafted to enable a taxpayer to commit fraud or abuse the system.

"Criminals cannot be permitted to commit fraud on the basis that this falls under the privilege rule."

Zikhulise Cleaning, Maintenance, and Transport CC consented for its invoices to be audited, Naidu said.

She said the embargo in the ADR process was not applicable to a criminal matter and applied only to civil proceedings.

Defence lawyer Jimmy Howse argued that Sars legislation stated that any information obtained during the ADR process could not be rendered in any subsequent proceedings.

He said there was no definition of subsequent proceedings in the legislation.

Howse told the court the State had not proved beyond a reasonable doubt that Mpisane knowingly handed in fraudulent invoices during the ADR.

Naidu said Mpisane applied to join Sars's Voluntary Disclosure Programme (VDP) on 8 July  last year, a month after she was charged with fraud and corruption.

Her application pertained to her tax affairs for 2009 and 2010.

Under the VDP programme, a taxpayer discloses information to Sars and is given an opportunity to resolve any outstanding affairs.

Howse has denied that Mpisane was aware of VAT charges relating to 2010.

Mpisane was not provided with a charge sheet when she was charged, he said.

Magistrate Blessing Msani will make a ruling on 3 December.

Read more on:    sars  |  shauwn mpisane  |  durban

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