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By Ciaran Ryan

Moneyweb: Journalist & Host of Moneyweb Crypto Podcast

Angelo Agrizzi fends off Sars in R174m tax case

Whistleblower says he owes the revenue service nothing, and that its claim of undeclared income was based on double- and triple-counting revenue moving between accounts.

Whistleblower Angelo Agrizzi on Monday kicked the South African Revenue Service (Sars) to touch over its attempt to claim R174 million in a ‘pay-now-argue-later’ dispute.

Sars was asking the Gauteng High Court for an order compelling the repatriation of assets held by Agrizzi in Italy.

The court refused, in part because the Italian-based assets were pledged as collateral for Agrizzi’s bail when he was arrested and then released on charges of fraud and corruption in 2020.

Agrizzi brought a counter-application to review the decision by Sars to repatriate the proceeds of his home in Italy, and its decision to demand payment of taxes even though a dispute as to the amount was underway.

The court found in favour of Agrizzi, ruling that the payment of the claimed taxes must be referred back to Sars for reconsideration in terms of Section 164 of the Tax Administration Act.

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Amount whittled

While the high court case was underway, Agrizzi’s legal team entered alternative dispute resolution proceedings to challenge the R174 million claimed by Sars.

The disputed amount was eventually whittled down to about R40 million, nearly R200 million less than the R230 million originally demanded by Sars. While Sars was applying the ‘pay-now-argue-later’ principle, the court found there were certain circumstances where this could be avoided.

“We don’t owe Sars a cent,” Agrizzi tells Moneyweb. “They [Sars] originally claimed an amount of roughly R230 million but this was based on double- and triple-counting revenue that was moving between my bank accounts.”

The high court application was based on an assessed tax liability of R174 million. Sars asked the court to order the repatriation of foreign assets owned by Agrizzi as he did not have sufficient assets in SA to satisfy the debt. Sars also maintained that Agrizzi had transferred assets outside of SA for no consideration or for less than their fair market value.

Sars placed a value of about R15 million on the Italian home, with cash of about R11 million and a BMW X5 worth R1.7 million.

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Interest piqued

Sars became interested in Agrizzi after hearing evidence of fraud and corruption at Bosasa, where he held the position of chief operating officer. Bosasa was later renamed African Global Group.

Sars convened a tax inquiry and Agrizzi was called to testify. The tax agency was of the view that Agrizzi had failed to declare income tax in his annual tax filings.

The ruling goes into detail on the legal difference between a ‘tax debt’ and an ‘outstanding tax debt’.

A tax assessment is not due and payable until it is final, and finality in turn depends on whether objections have been raised and appeals heard. In Agrizzi’s case, they had not.

A key argument raised by Agrizzi is that he would be in breach of his bail conditions if forced to sell his house in Italy and repatriate the assets to SA.

The ruling by Judge Annali Basson agreed with this argument.

Sars acknowledged that should Agrizzi breach his bail conditions he would be remanded in custody within 48 hours, and the solution to this would be to negotiate his bail conditions with the National Prosecuting Authority (NPA).

This was an untenable argument, according to the court, adding that the NPA should have been joined to the proceedings to establish its position on Agrizzi’s bail conditions in the event his Italian home had to be put up for sale.

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The heavy price of whistleblowing

Agrizzi believes he’s paid a heavy price for his decision to turn whistleblower and shine a light on the corrupt dealings at now defunct facilities management company Bosasa, where he worked for nearly two decades.

His testimony featured prominently in the Zondo Commission of Inquiry into allegations of state capture, which found that Bosasa had paid R75.7 million in bribes between 2000 and 2016 to secure contracts worth more than R2 billion.

Rather than enjoying whistleblower protection, Agrizzi’s life started spiralling out of control.

He was arrested in October 2020 on charges of fraud and corruption, and says an attempt was made on his life while incarcerated at Joburg’s ‘Sin City’ prison.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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