Fin24

Christo Wiese's R2bn tax bill

2012-08-12 10:43

Johannesburg - The third-richest man in the country, billionaire Shoprite boss Christo Wiese, owes the taxman an estimated R2bn in unpaid taxes.

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.

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Comments
  • altusvanzyl - 2012-08-12 10:56

    uuhm ouch

      seymore.butt - 2012-08-12 12:27

      Ouch it is! Corruption has no color.

      sandra.j.rennie - 2012-08-12 22:04

      Why is the current Government fat cats running short of Cash ? Now they have to get it from someone !

      mihaip007 - 2012-08-13 03:40

      these R2bn seems to be a lot in the news lately! The zumaville project, the airplanes, now this? weird - really weird...

      amanda.victor.92 - 2012-08-13 04:36

      Isn't that the money Zuma needs for his new Zumatown? Amazing that the only government department that seems to work is SARS! The ANC are a joke.

      klippies.coke.7 - 2012-08-13 11:50

      The tax man can be glad it's not Kobus Wiese. I wouldn't want to be the guy going up to him to try to make him pay.

  • frans.vanderpoll - 2012-08-12 11:05

    Flippen muhr!! R2bn in taxes and the Sabc threatens 'ordinary' people with court and jail for a few hundred in outstanding tv licenses.

  • ian.d.samson - 2012-08-12 11:15

    He can pay the e-Tolls so we don't have to!

      bulumko.lusu - 2012-08-12 12:04

      lol, lol, lol!!!!

  • marc.potgieter1 - 2012-08-12 11:19

    Wow, that amount of money would keep at least three corrupt ministers happy for a couple of months.

      frank.cornelissen.1 - 2012-08-12 21:36

      With their appetite for corruption and spending it will more likely last to around the 15th!!

  • patrick.saunders123 - 2012-08-12 11:27

    typical rich a-hole. Like dave king, wiese thinks laws only apply to plebs. Plus he wants a 50% discount on what he owes. I want one, too.

      kevin.watson.7906 - 2012-08-12 15:06

      He is a bit cheap one of my consulting clients was offered a 60% discount by SARS on an estimated(not an assessed) tax bill. The only thing I am certain of is that my client does not owe the money. SARS are attempting to blackmail this business into paying an amount they do not owe by threatening them with an extensive tax audit, and offering a cheap settlement.

      Alonso - 2012-08-14 10:24

      If he is a tax dodger he must pay up, plus the full penalty added. No discount to dishonest people. @kevin; I agree SARS does apply bully tactics, I deal with it often. If you facts are in order then don't budge!

  • lownabester - 2012-08-12 11:30

    No hell, they will come after me for R200.00 how do these people get away with this,

  • robin.stobbs.9 - 2012-08-12 11:34

    And the slob wants a discount? WTF - slap him with the full amount owing plus penalties just like you would with us ordinary trying-to-make-a-living people. One law fits all, OK?

  • paul.anthony.dawson - 2012-08-12 11:39

    SARS - the ONLY government authority that works with a great deal of efficiency. After all, it's the governments cash cow which funds their endemic greed and self-serving corruption that currently rots the economy away. Who investigates the government and brings them to account?

      bernard.linde - 2012-12-12 08:00

      I agree, but even though they are efficient, they are clearly biased as well. Harrassing normal people about small outstanding amounts, but the super rich are allowed to have R2bn outstanding before it hits the news??

  • wendetutubalang.wende - 2012-08-12 11:39

    That amount of that money is very serious and it must be collected back to ensure that our government dispense service delivery to the poor. This tendency were the rich want to be rich for_ever until such time they undermine policies regulation sars is this country cannot go unchallenged. Punishment must be enforced because the owner does not forget to count his profit every month

      pieter.budtools - 2012-08-12 13:26

      Yes, cough up mr Wiese. The poor mr Zuma needs R2 Billion for setting up service delivery in Zumaville

      JHLR73 - 2012-08-13 14:04

      The sad things is that even when the money is collected , it will not reach the poor! They do not care about the poor. The money will just dissapear into the corrupt system again, therfore more and more tax payers are withholding their taxes.They do not see the purpose of paying taxes when the corrupt officials steals it in anycase.

  • douglas.reid.921 - 2012-08-12 11:39

    Makes Juju look like a schoolgirl. He must belong to the ANC, got all the credentials.

  • jean.tredoux.5 - 2012-08-12 11:39

    He's just doing what we should be doing but still, what jerk!

  • eric.f.moloi - 2012-08-12 11:42

    He still wants more @ his age,its time 4 him 2 retire n spend it,he had it all ,wht more nw?

  • william.leseka - 2012-08-12 11:52

    Paying workers peanuts while dodging Tax,what is wrong with this so called Rich people. this dude is a thieve

      stirer.kathray - 2012-08-12 12:35

      William, greedy or not, rich people create jobs - either directly or just as an unplanned byproduct of their wealth. Its one of the benefits of a capitalist society. If you spread the wealth of the rich evenly across the whole country, then everyone would be poor; then there would be no risk takers, and no job creation. Unfortunate as it is, its a fact of life. Where would a bunch of poor people get money from, to build shopping malls, factories and houses?

      pieter.pan.184 - 2012-08-12 14:36

      @stirer.kathray: So rich people will build shopping malls, factories and houses for people who can't afford to pay for any of it? Rich people do not create jobs. No one starts a business to create jobs. Jobs are a by product of a new business and most new businesses are not started by rich people, but by the middle class. In fact a large percentage of new businesses are opened by people who didn't even finish high school. We need the wealth to be spread more evenly so that we can have a bigger middle class; not so that they can open more businesses, but so that there are more people who have expendable income with which to buy things. Only when companies get more customers will they employ more people and perhaps open more stores. If the rich keep increasing the share of the money that they take home, that leaves less for other people and the middle class shrinks. This also means that businesses suffer because less people can afford the services they offer.

      nigel.vanysendyk - 2012-08-13 08:49

      The irony of all this is that rich people constitute maybe 1/2 a percent of the population, they own possibly 90% of the wealth, there are 2600 high net worth individuals in SA (with more than R 75 million) but only 360 of these are registered to pay tax. Also, what many Black people, that advocate radical wealth distribution, dont realize, is that these wealthy people that own most of the countries wealth, have the capacity to move this wealth out of the country, & have undoubtedly already moved Billions out, i.e. the wealthy are a tiny minority that have full control over their empires, the rest of us have loans, bonds, credit cards, liabilities, 90% (if not 100%) of what we "own" belongs to the bank.

      afrikeni - 2012-08-13 10:51

      @ Nigel, you do not have to spit it out. I know, the bank & insurance companies own me, lol.

  • leila.loupez - 2012-08-12 11:55

    These are the real criminals. First, by making the public pay too much for their basic needs, how else would he have become the third richest man? Then by conning SARS, and in effect the public AGAIN. Lock him up. Small fish are being dragged to prison for pity crimes, pity fraud, these guys are able to negotiate...its just so unfair.

  • sekwati.robinson - 2012-08-12 11:56

    shoprite employees earn peanuts....they live from hand to mouth...I doubt he's worth 25 billion,maybe 50...

      kevin.watson.7906 - 2012-08-12 15:09

      Dont blame Christo Wiese for the actions of Whitey Basson. He is the man responsible for the low salaries.

      antebellum.axiom - 2012-08-14 01:09

      You have to be realistic as well. You cant expect to have a middle class lifestyle if you are working behind a till. A quick economics lesson: The scarcer something is the more valuable, the more abundant the less valuable. For example, if there were only a few hundred people who could work behind a till, their salaries would be huge. But unfortunately it does not take alot of skill to master, so almost anyone can do it. This means that there is a massive over supply for that kind of labour, so the compensation for it will be in the very low ranges. It is the same with products. If there is an over supply the price of each will become lower. If there it becomes scarce the price of each will increase. That is why a kilogram of gold is worth almost half a milion Rand and a kilogram of grass worth nothing.(Unless it is "special" grass)

  • pule.lesego.3 - 2012-08-12 12:00

    He think is going to live forever......

      bless.boswell - 2012-08-12 12:05

      Pule, that's the joy, he's not going to live forever and then he will find you go out as naked as you came into this world and PLUS you have to account to your maker. Karma is a bitch!

  • The-Azanian - 2012-08-12 12:00

    Yoh...rich people are indeed greed. American capitalists and greek billionaire tax invaders placed the world on coma and its the poor and middle-class paying dearly...sic. I just can't believe that the same shoprite that ripped billions booming township malls paid billions to a single person instead giving a little back. Im definately switching shoprite for community caring Pick n Pay permanently.

      sagren.narain - 2012-08-13 08:26

      Work hard mook - then you too can feel the knife

      richard.sloman.5 - 2012-08-13 11:47

      "Tax invaders..." LOL!

  • Luyanda - 2012-08-12 12:00

    Now WE CAN SEE one of the people who inspired the Black Elite to have a SATANIC LOVE 4 MONEY. Paying people peanuts that make HIM RICH and EVADE TAX. How GREEDY Meneer....

      nigel.vanysendyk - 2012-08-13 09:02

      Yup, stinking rich people are generally not very nice people, there are exceptions though, that pay their taxes, give back to the communities & that care about others, like Bill Gates, Richard Branson & U2's Bono, but you dont have to be rich to give back. What is important is that rich people should help to create jobs, they should be treated carefully, because it is very easy for them to take their money somewhere else, can you imagine how many jobs would be lost if Christo Wiese took his empire elsewhere, but he should pay his taxes.

      richard.sloman.5 - 2012-08-13 12:05

      Nigel, All those you mentioned have given back in some way but I can assure you Mr Gates et al also have ways and means to lessen their tax burden; foundations and the like, so I am not sure even those guys are squeaky clean, they are just a bit cleaner than others... As for our own Mr Weise, I dont condone him not paying taxes, but he has done more than simply enrich his own life, I agree if he owes taxes, let him pay up, just dont knock him for his success...

  • eric.f.moloi - 2012-08-12 12:07

    Carrying 8m in cash,WTF!ds timer is connected to de underworld

  • douglas.reid.921 - 2012-08-12 12:12

    If this was China they would have sorted him out chop chop. The rich are always above the law. How many RDP houses is that? Could we use a strong government or what. Even Bob would know how to deal with this.

      pieter.budtools - 2012-08-12 13:45

      Don't worry about the RDP houses. Zumaville is priority.

  • davesub - 2012-08-12 12:15

    Hmmmmm .... 2 billion outstanding from Wiese and R2 billion required to create Zumaville - Wiese = you pay then Zuma = I play! Too much power = beyond the law ...

  • The-Azanian - 2012-08-12 12:23

    And our prez is busy building a R2bn zumaland in nkandla in fear that he might not be re-elected. Whats wrong with this money loving self centered dinosaurs. And they expect the youth/workers to behave while they busy invading tax/corrupting treasury.

      bless.boswell - 2012-08-12 12:32

      Yep, they expect it and they'll get it too when everybody flocks to the polls. Just wait and see ...

  • sipho.mbulawa - 2012-08-12 12:36

    71!!! Who tipped this guy about ATMs beyond death. I just feel sorry for the people who sweat for him daily and walk away with loaf brown.

  • dsundire - 2012-08-12 12:41

    R8 million represents ''less than two weeks of his income and a minute fraction of his assets''

  • george.pito - 2012-08-12 12:43

    yeh stirer kathray maybe right. Then it cannot be that difficult to just clamp down on his actions and put the whole lot under control (of an incompetent government)Just take everything he has. How did this get so out of hand. See it is things like this that feeds thoughts like Malema. Then the Christopher guy maybe it worth while clamping a bit down oon him. The poor chap did nor realise that by responding to this the new info age are gonna clamp down on him. See thats my point It so easy to use technology to pick this up.

  • douglas.reid.921 - 2012-08-12 12:45

    Little people get treated like criminals, get blacklisted etc when they have a problem with a bit of debt. Big people just laugh it off, negotiate a deal or just get away with it. We need real government, this circus is beyond funny. Huge unemployment and huge tax default. The one would Vic the other? Real government please, enough of these clowns.

  • Johann Enslin - 2012-08-12 12:52

    How many jobs has he created?

      olivia.kgatla - 2012-08-13 17:26

      They only have temps, casual laboures and labour brokers at shoprite. U can work a six day week, for twenty years and still remain a casual worker

      denny.cray - 2012-08-14 13:16

      @Olivia - Well, I'm not sure that is the case but it would certainly be interesting to compare how things have changed in the past 20 years and why?

  • Zahir - 2012-08-12 13:10

    The govt needs the money for the R2bn Zuma boeing so he will have to pay for it

  • sa.gunner.5 - 2012-08-12 13:11

    This same Wiese was also involved with the embezzlement of a pension fund surplus that belonged to the disadvantaged who worked in his clothing factories. We heard nothing of this misdeed subsequently! Recently he won a court case in London for having been caught with lots of money carried in in cash! Clearly this man the government needs to be wary of!

      gotterdammerung.sa - 2012-08-12 13:47

      In the same breath you should ask why has nothing happened to Tony Ehrenreich when R100m was pillaged from another textile unions' pension fund whilst under his watch.

  • gotterdammerung.sa - 2012-08-12 13:43

    There we go - Zumaville paid for

  • malusi.shumane.7 - 2012-08-12 13:44

    In as much as I would like to afford 99.9% of the things I want in life, I don't want to be super rich.

  • somikazi.pita - 2012-08-12 13:56

    As far as I'm concerned, all the 'shoprite' stores should be closed down because they're all filthy!

  • bongani.dlamini.756 - 2012-08-12 13:58

    tax evasion will forever remain a big challenge to SARS for which the main culprits will always be the "richest", the solution is simple...SARS should start treating every individual equal by having access to everyone's finances either rich or poor. like they deduct my monthly salary, why not to Wiese's wealth!!!

      Trent Hodges - 2012-08-12 14:19

      SARS doesn't deduct from your salary, your company does, and the pays SARS on your behalf- if you don't understand that then the Complex tax problem, involving interest, dividends and offshore assets etc does not concern you, nor your ignorant comment

      kevin.watson.7906 - 2012-08-12 15:13

      I can tell you that his Directors fees are subject to paye just as your salary is.

  • maria.roth.589 - 2012-08-12 14:25

    Maybe he doesn't want to pay for Showerville. Many have threatened maybe he figures he's rich enough to take on corrupt officialdom Lol

  • sipho.shabalala.796 - 2012-08-12 22:45

    The South African Romney

  • theo.joubert.37 - 2012-08-13 07:34

    Over the years there have been many front page stories of people owing SARS a lot of money. They always fail to mention that there are apeal processes. Most of these cases went through years of apeal prosesses and almost all of them in the end did not owe SARS in the end. I can recall the METCASH case a few years back. It was front page news but when SARS lost the case it did not even reach any news paper. I can only wonder if they would print any report on this case once all the apeal processes went its course.

  • sisie.indola - 2012-08-13 07:36

    Am i the only one to notice or has this R2billion become the norm - R2billion for airplane, R2billion for Zumaville, R2billion owed to SARS by Wiese - or what the f*** is it. Everything is R2billion (with the exception of e-tolls - which is R22billion) something very fishy here.

  • trevor.pietersen.3 - 2012-08-13 08:18

    THEY want the money for ZUMAVILLE

  • sagren.narain - 2012-08-13 08:24

    Dont you love it when SARS say " fair share" - we get punished here for working harder and earning more while the layabouts spend all our hard earned tax rands on bodyguards.

  • nigel.vanysendyk - 2012-08-13 08:25

    It makes me sick how the ultra rich seem to think they are different from the normal man in the street, they have a responsibility to help lead the country, they should be setting the example, they should be giving back, unfortunately the ANC govt's blatant squandering (stealing) of tax payers money doesn't encourage people to pay their taxes.

      victor.tamaranui - 2012-08-13 18:35

      Nigel, Let's get this 5 Billion Rand issue categorized. For the sake of this discussion let's assume the total is correct, 5 Billion Rand (This is a top end estimate) is less than an eighth of One percentage(1/8) of the GDP.(408 billion US dollars in 2011 equates to 3264 Billion Rand at 1 US$: R8. Some of yous carry on beating a little drum without having the entire knowledge required to make factual comments. The other is the text-book saga, This affects less than 2 % of the Students receiving basic education in RSA. The failings are unfortunate however regrettable and lessons will be learnt. Stop feeding your deluded pessimistic outlook with the failings and accommodate successes as well. Life will feel better like it should as it's your perspective that is betraying you into this Doom and Gloom philosophy.

  • richard.zanner - 2012-08-13 09:16

    That is exactely how much Zuma needs for Zumaville.

  • henk.venter.754 - 2012-08-13 09:36

    How is it that SARS can provide the detail regarding Wiese's outstanding tax, but the Malema tax issue never get further than the initial report? How does the media get hold of Wiese's information if SARS is suppose not to tell but the amount they wrote off that Malema owned them, was never published?

      mzakes.matabata - 2012-08-13 10:47

      why are you trying to justify this criminal act? if you want to rid SA of corruption by the ANC and crimes like these, why are you taking this position that because it's not the ANC than it's fine because they the ANC also does it.

  • napolita.kio - 2012-08-13 10:28

    One needs to watch the developments out there at Brait! What of the sudden prefs being issued by Brait for reasons not clear and certainly not convincing!?!

  • vivian.pitschlitz - 2012-08-13 13:09

    You seem to have linked the wrong Christo Wiese to your article. This is the correct Christo Wiese http://www.whoswho.co.za/christo-wiese-1134.

  • gail.welman - 2012-08-13 15:07

    And us poor buggers just keep paying every month.

      vincent.mafooa - 2012-08-14 12:28

      Oh well thats the sad part of it. I'm trying to revise a plan on how i can evade tax without getting caught, m sure there must be a way....*drummingfingersonthetable,andthinkinghard*

  • bongani.nsele.58 - 2012-08-13 15:27

    no surprise here....only fools will be surprised

  • victor.tamaranui - 2012-08-13 18:20

    Usual corrupt Detractor tripe...however some gems indeed. These tax offenders need to pay their dues like the rest of us. Take that Ferrari.........give it to ME.

  • mark.sanderson.9022 - 2012-08-14 09:06

    Now I know why I am waiting for SARS to pay me!!!!--It is because of these guys--Come on, pay your taxes so that SARS can pay me!!!!

  • Claudine Fourie-Grosvenor - 2013-05-18 16:16

    *** THE NEWS BY CLAUDINE's BROADCASTING AGENCY ON FACEBOOK - I HAVE NO TIME TO READ THIS AT PRESENT AS I AM TOO BUSY WITH OTHER RESEARCH AND STUDIES, BUT I AM PLEASED TO AT LONG LAST READ SOMETHING ON THE INTERNET ABOUT CHRISTO WIESE WHO HAS BEEN FAR TOO SHADY AND CLANDESTINE FOR MY LIKING AS I HAVE BEEN CHECKING UP OUT FOR HIM AND NOW ONLY FIND A BIT OF INFO ON THE INTERNET ABOUT HIM. QUESTION:- PRECISELY WHICH DATES WAS HE MINISTER OF FINANCE OR HEAD OF THE RESERVE BANK AND WHAT ABOUT ....STALS, I SEE NOTHING AND WHEN PRECISELY DID HE GET INVOLVED WITH CHECKERS - I NEED TO SEE THE DATES? THANKS, CLAUDINE!

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