A Sars official testified that businesswoman Shauwn Mpisane lodged claims on luxury cars on behalf of her company.
|||Durban - Durban businesswoman Shauwn Mpisane claimed for VAT on a Lamborghini, a BMW M3, a Porsche and a Hummer.
Waheeda Osman, audit specialist at SA Revenue Service (Sars), who conducted an audit into Mpisane’s lifestyle up to the 2007 tax year, testified at the Durban Regional Court on Thursday that Mpisane had lodged claims on luxury passenger vehicles on behalf of her company, Zikhulise Cleaning Maintenance and Transport CC.
Osman said claiming input tax on passenger vehicles was not allowed.
“Mpisane treated the vehicles as stock and claimed they were dealing in motor vehicles and therefore were entitled to claim. We discovered no trading activity and therefore the claim was disallowed.”
“The accused (Mpisane) said she needed the Hummer to get around construction sites. I could entertain that for the Hummer, but not for the Lamborghini, BMW M3, etc,” Osman said.
The court heard that in 2007 Mpisane had declared a dividend of about R10.5 million and in the following year, it had declared a R47m dividend.
Osman said that tax on the dividend, known as Secondary Tax on Companies (STC), was payable to Sars within a month of being declared. At the time, the STC was 10 percent.
Osman said Sars had no receipt of payment for the dividend tax, as a result of which, the 100 percent additional tax was imposed.
This penalty was taken on objection.
Mpisane and her company are facing 119 counts of fraud involving R4.7m for allegedly submitting fake invoices and financial returns to the taxman.
Mpisane has pleaded not guilty to the charges, and in her plea statement laid blame on Kishal Reddy, her former bookkeeper.
Reddy, who is now a State witness, had pleaded guilty to two charges, one of forgery and another of contravening the VAT Act.
He was sentenced to R30 000 or six months’ imprisonment.
Mpisane is also facing 53 counts of fraud, forgery and uttering, at the Durban Commercial Crime Court, relating to her alleged submission of false documentation to the Construction Industry Development Board.
In February 2010, in the appeal against the 100 percent levy, Osman on Thursday said that a reviewed financial statement was provided by the new accountant, Trevor Dalton, who reduced the profit from R74m to R44m.
Osman said this was done by attributing the amounts in Mpisane’s loan account to cash purchases - R16m - and salaries - R12m.
This reduced the dividend from R47m to R27m, which would have also reduced the STC from R47m to R28m, she said.
Osman said this reduced the tax payable by Zikhulise from around R23m to about R15m.
Osman’s intervention was needed to verify the validity of the reduction.
With the help of a co-auditor Osman, verifying cash purchases, approached the vendors directly, asking for their VAT output records.
“Not all the vendors were co-operative. Some vendors said they had (experienced) flooding, fires and other strange things and couldn’t locate the documents,” she said.
Osman did, however, successfully approach the owner of DSD Trading cc, trading as Eveready Brick and Block.
“We noticed that the invoice numbers were very different to the ones provided by Zikhulise. The owner said the invoices were not his and were forged.”
Due to time constraints, Osman said similar investigations could not be carried out for all the vendors.
Osman told the court that she was tasked with conducting a lifestyle audit on S’bu Mpisane and, in order to understand his information, an audit had to be conducted on his wife Shauwn’s close corporation, Zikhulise Cleaning Maintenance and Transport CC, which appeared to be funding her husband’s lifestyle.
The court heard that the Mpisanes accepted the findings of the audit of S’bu and the account was paid in full.
rizwana.umar@inl.co.za
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