Deputy Speaker, after almost a decade, businessman Dave King has confessed to having made a mistake in refusing to co-operate with the tax authorities. He said this after agreeing to pay Sars R706,7 million to settle his tax debt. In terms of the High Court, Mr King had said that not co-operating with the Sars authorities has been a big mistake. He had 41 counts of contravening sections 62 and 75 of the Income Tax Act of 1958.
In response to the judgment, Mr King said choosing not to co-operate with Sars was a big mistake. He went on to say:
I regret not engaging with the state sooner, as I have found them to be extremely firm but fair in their dealings with me once I fully engaged with them. I accept the fact that I have been noncompliant in the past and will rectify this.
The conclusion of this dispute presents valuable lessons to all of us in the event that a taxpayer is approached by Sars and asked to explain their tax affairs; the correct measure of action is to seek an early resolution and co-operate fully with Sars."
Sars is approachable and will be able to assist in settling any dispute a taxpayer might have in a manner that is consistent with the applicable legislation. Any concerted effort to unlawfully shift tax obligation offshore through a design of complex tax avoidance structures will ultimately be uncovered and result in punitive measures against the taxpayer.
Undertaking protracted litigation in defence of disputes raised by Sars is indeed a constitutional right. However, it should be noted that should such a course of action be mala fide, it is likely to exacerbate both the state and the defendant's financial costs. [Time expired.] [Applause.]