Cape Town – Don’t try to fight Sars.
This is the conclusion drawn in the Dave King case after a legal battle spanning 13 years, according to his attorney Deborah Di Siena of Routledge Modise in Sandton.
The Scottish-born King settled on a payment of R706.7m to the South African Revenue Service (Sars) on Thursday. This is in respect of his personal income tax and the tax liability of Ben Nevis, a King trust company managed out of Guernsey.
The fraud charges against King were not pursued by the State and King accepted liability in respect of 41 lesser counts of contravening Section 75 of the Income Tax Act.
This includes the failure to disclose information and the failure to provide correct information about incomes earned over a number of years.
“The lesson to be learnt from this case is that one must rather engage with Sars from the beginning,” Di Siena told Fin24.
“Sars is actually fair and if you cooperate with them from the word go, they will be approachable and assist you to resolve the issue rather than spend millions on litigation.”
The new Tax Administration Act gives Sars enormous power apart from the unlimited resources at their disposal for litigation, according to Di Siena.
After a saga spanning 13 years King and his family can now continue to reside in South Africa (in Johannesburg) and he can conduct his business as chair of Micromega Holdings [JSE:MMG], an investment and acquisitions company, she said.
“It had taken months of negotiations and for the first time we managed to secure a settlement with Sars, the SA Reserve Bank (Sarb) and the National Prosecuting Authority (NPA) in order to finally bring an end to all the litigation,” she said.
“It took a great deal of work to nurture relationships between the parties and it ended up being very amicable.”
Negotiations, which were quite acrimonious at times in the past, failed repeatedly because of what she calls different sections of the NPA having divergent interests.
Although King was acquitted in September 2012 on a related criminal matter brought by the NPA, the second case, which was settled last week, was much more complicated and the docket ended up consisting of more than 300 000 pages.
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