The team that nailed Julius Malema

2014-02-23 14:00

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It was perhaps arrogance and a sense of invincibility that led to Economic Freedom Fighters (EFF) leader Julius Malema’s latest predicament.

If a judge finalises Malema’s provisional sequestration when he returns to court in May, he won’t be able to take up a seat in Parliament, supposing the EFF gets the estimated 50 000 votes it needs to send at least one representative.

The North Gauteng High Court provisionally sequestrated Malema earlier this month because he owes the SA Revenue Service (Sars) R16?million in unpaid taxes, interest and penalties.

Like Radovan Krejcir, Lolly Jackson, Barry Tannenbaum and Billy Rautenbach, Malema was investigated by Sars’ elite tax and customs enforcement investigations (TCEI) unit. Although the EFF has reacted angrily to the order, saying Malema only owes R4?million, this is nonetheless an amazing confession. Malema has long denied owing the taxman anything, and EFF spokesperson Mbuyiseni Ndlozi said there was “political intent behind Sars’ pursuit of the commander in chief”.

The EFF has established an independent trust to raise money to either pay off the Malema’s debt or counter the sequestration in court.

The EFF’s commissar for justice and special projects, Advocate Dali Mpofu, said the party would go as far as the Constitutional Court to save Malema from financial ruin. Gone – for now at least – are Malema’s Breitling watch, Gucci suits, multimillion-rand houses, Limpopo farm, black Mercedes-Benz AMG and lavish parties – all funded by an ANC Youth League salary of R25 000 a month.

And that is what prompted the TCEI unit to investigate him. Court documents and Sars statements show how the taxman almost begged

Malema to comply and settle his debt.

In 2010, Sars contacted him after he failed to submit his tax returns for a number of years. Malema promised to submit them within a month – but took 18 months.

He then hit back by releasing his “intelligence dossier”, which exposed the TCEI unit’s existence and alleged that Finance Minister Pravin Gordhan was

behind a campaign to discredit “Zuma people”. In July 2011, Malema publicly invited Sars to audit his tax affairs, claiming they were all in order.

But Sars discovered Malema had not registered his Ratanang Trust, the entity through which he allegedly laundered the money he was paid by others, and ignored a number of Sars’ requests to register it.

When he eventually submitted his returns, they were inaccurate.

Malema also tried to transfer his assets to third parties in a clear attempt to hide them from the taxman.

His initial tax assessment was R4?million, but it ballooned with interest and penalties because the law at the time determined tax evaders should be slapped with a 200% penalty.

Malema did not respond to several attempts by Sars to get him to pay or reach a settlement, leaving it with no choice but to obtain a default judgment. It was only after Sars obtained the judgment that Malema offered to settle.

The service has committees which consider these offers which neither the finance minister nor the Sars commissioner can influence.

To reach a settlement, the taxpayer must make a full and frank disclosure of his financial affairs and disclose all assets and liabilities. And as Malema never tried to pay anything towards his tax debt, his offer was rejected.

Sars insists Malema was treated no differently to any other tax defaulter and that he consistently showed disregard for his obligations.

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