The tax assessment for Wiese is the largest in South African history and potentially makes Wiese the largest individual tax offender in South Africa.
City Press has established that an in-depth South African Revenue Service (Sars) audit has revealed that Wiese has over years allegedly channelled his vast wealth into a network of trusts and offshore companies.
A year ago Sars presented Wiese with a tax assessment of about R1bn, three sources with knowledge of the matter confirmed.
An ongoing tax audit and assessment has now revealed that he might owe Sars an additional R1bn in unpaid taxes, the sources say.
Wiese had already paid hundreds of millions of rand as security to Sars and was negotiating in an effort to resolve his tax problems.
City Press understands he is expected to offer Sars a settlement amount - probably half of what he owes - in order to clear his tax bill and keep his affairs out of the public eye.
Wiese said he would not react to a list of questions that City Press posed to him.
He said there were prescribed procedures according to which disputes between taxpayers and Sars were resolved and he was not prepared to comment on any such dispute in the media.
Wiese said all his foreign interests were – according to regulations – declared to Sars every year and it was therefore not necessary to inquire about his affairs abroad.
Sars spokesperson Adrian Lackay declined to comment and said Sars did not – and could not – comment publicly on the affairs of any taxpayer.
The authoritative Forbes magazine says the 71-year-old Wiese is worth an estimated R25bn and his wealth is surpassed locally only by that of mining and business magnates Nicky Oppenheimer, Johann Rupert and their families.
The retail magnate, who chairs Pepkor, Shoprite and Tradehold, is the 367th-richest man in the world.
The Sars investigation into Wiese was sparked after British custom officials stopped Wiese at London City airport en route to Luxembourg in 2009 and seized nearly £700 000 (about R8m) he was carrying in cash.
He explained that the money came from diamond deals and had been in a safety deposit box in London for years.
He was en route to Luxembourg to invest the money.
Wiese launched a court application in London and his money was recently returned. His lawyer said in court that the R8m was consistent with Wiese’s stated wealth and represented “less than two weeks’ income and a minute fraction of his assets”.
Sars investigators discovered that Wiese had over years declared a relatively negligible taxable income that was in sharp contrast to his obvious wealth.
The investigation then revealed a network of trust accounts and companies. Wiese also allegedly made use of complex financing agreements in order to avoid paying tax.
Sars further discovered that Wiese held several offshore accounts, most in traditional tax havens.
Sars was able to obtain information about these offshore accounts following a 2009 initiative by the G20 countries to force these havens to allow scrutiny of accounts to national authorities in certain cases.
Lackay would not comment on whether criminal charges would be brought against Wiese, again saying that Sars was bound to respect taxpayer confidentiality.
The Income Tax Act provides for a fine or imprisonment for any person who had wilfully evaded paying tax.
The Pepkor group owns 2 800 stores including the Pep Store, Ackermans, Dunns and Shoe City brands – and is the controlling shareholder of Shoprite, Africa’s largest retailer.
Wiese sits on numerous other corporate boards and also has investments in gold and diamond mining concerns, real estate holding companies and is involved in a private equity firm with investments in jeweller Fabergé.
He owns vast properties, among them a private game reserve in the Kalahari and the prized Lourensford wine farm, a 300-year-old estate at the foot of the Helderberg mountains in the Western Cape.
South Africa’s worst alleged tax dodger up till now has been businessman Dave King, who has been involved in a ten-year multimillion-rand tax wrangle with Sars.
King was assessed in February 2002 as owing more than R900m in tax to Sars.
This assessment remains disputed and the subject of appeal procedures.
Sars recently announced that it had uncovered 9 300 South Africans, most of whom have wealth in excess of R75m and who had earned more than R7m last year, had failed to properly pay their fair share in taxes.
These 9 300 individuals are potentially responsible for a R50bn tax shortfall.
A quarter of them are on Sars’ register but are not tax compliant while 7 000 are unregistered.