Alleged fraudster wins precedent-setting tax ruling

The court ruled that the SARS unlawfully cancelled the company's tax clearance certificate. Judge Gregory Wright granted the order following an urgent application by businesswoman Shauwn Mpisane's business, Zikhulise Cleaning, Maintenance and Transport CC. Wright ordered that, pending the outcome of a review application, the SARS decision to withdraw Zikhulise's tax clearance certificate for the year would be of no force and effect. Mpisane and her business are to stand trial in the Durban Regional Court in June on charges of fraud and tax evasion. Wright said the fact that SARS afforded Zikhulise an opportunity to make representations only after the decision was made in March was not competent in law. Full report on the IoL site

Mpisane's lawyer, Rafik Bhana SC, said the interim judgment could have wide-ranging ramifications for the taxman - it could mean that all non-compliant taxpayers should be given an opportunity to defend themselves. 'This will mean that SARS may not just withdraw a tax clearance certificate and then inform the taxpayer later. This is a precedent-setting judgment because SARS can't just arbitrarily take away the certificate,' Bhana is quoted as saying in a City Press report. According to court papers, Mpisane argued 'there is no explicit statutory provision or rule of any sort which grants SARS the power to issue so-called tax clearance certificates which SARS must take into account before issuing such certificates'. She argued that SARS had sought to regulate the issuing of such certificates using an unlawful policy. Full City Press report