Who is settling Julius Malema's taxes?

2014-08-24 15:00

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As he appears in court tomorrow, Julius Malema faces tough questions from the taxman about where he got the money to pay his R18?million tax bill.

Malema will appear in the North Gauteng High Court for a ruling on whether the provisional sequestration order against him should be finalised or set aside.

But the SA Revenue Service (Sars) will ask the court to extend Malema’s provisional sequestration for two more months while it investigates who has been coming up with his monthly payments to the taxman.

Impeccable sources have told City Press this week that alleged tobacco smuggler Adriano Mazzotti was a generous financial donor to Malema and may well be the source of the repayments.

Mazzotti, a director of cigarette company Carnilinx, is also under investigation by Sars for smuggling and tax evasion.

This week, Mazzotti told City Press that he was “good friends” with Malema.

He also admitted to contributing R200?000 towards the registration of the Economic Freedom Fighters (EFF) earlier this year so the party could participate in the May general elections.

And he said he had paid donations tax on his contribution.

However, Mazzotti denied settling Malema’s tax bill. “I’m being assessed by Sars at the moment and I suspect they are going to hit me hard,” he said.

“I won’t be able to afford these payments.”

A furious Malema yesterday refused to comment on his tax bill, saying it was “nobody’s business” who was paying it.

He said if Sars was investigating the origin of the payments, he would be furious and he regarded that as a breach of confidence.

“They have never asked me where the money has come from,” he said. “Why do they say to the media they want to know but they don’t tell me? This is very unprofessional.”

Malema said Sars was going back to its “old ways”. And he said he would complain.

“We’ve established a relationship. I’m cooperating with them and I am complying with the letter of the agreement,” he said. “What ploy is this now? I have nothing to hide.”

Carnilinx has been accused of hiring private investigators to gather information on Sars investigators and the police in an attempt to stop probes into its tax affairs.

Sars has opened a case against Mazzotti and other Carnilinx directors with the Hawks. The case is being investigated.

Mazzotti, a flamboyant character, said he used to be an ANC member but now believes the party needs to move left in their economic direction – towards the EFF.

He is a director of at least 17 companies and one of his business associates is convicted drug dealer Glenn Agliotti.

A source close to the investigation told City Press this week that Sars wanted to establish whether any dirty money, from any source, was used to settle Malema’s tax bill.

If it had been, it would compromise the agreement between Malema and Sars. Sars also wanted to know if the people financing the payments had paid donations tax on their contributions.

Sars spokesperson Adrian Lackay said this week that when the provisional sequestration order was granted in February, two trustees were appointed to oversee Malema’s estate.

Their duties included receiving monthly payments towards Malema’s tax bill.

“Sars has requested the trustees to verify the origin of the payments to ensure the conditions of the compromise offer are adhered to,” Lackay said.

However, Malema’s tax problems could be even worse than R18?million. He is expected to owe even more after Sars conducted an additional assessment for his 2011 and 2012 tax years.

Malema confirmed that Sars was conducting further assessments of his tax affairs, but said he did not have any details about them.

The 2011 and 2012 tax years were not originally assessed by Sars when they presented Malema with a R16?million tax bill which, in the meantime, has grown to R18 million.

Malema’s political future rests on his tax battle with Sars. If the provisional order for his sequestration is set aside, he can continue to serve as an MP. If he is sequestrated, he cannot be an MP.

The agreement Malema struck with Sars compelled him to lay bare his financial affairs, and make a full and verifiable disclosure of his assets, liabilities and sources of income.

In a statement after the agreement, Malema pledged to ensure that his tax affairs were in order and promised to comply with the conditions of the agreement and all tax laws.

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