SOUTH AFRICAN REVENUE SERVICE
MEDIA RELEASE NUMBER 9 OF 2001

8 FEBRUARY 2001

SARS v TAYOB FAMILY

Recent comments in the media in respect of the manner in which SARS deals with tax and Customs disputes require SARS to publicly restate its approach to these matters.

SARS aims to be a more business-orientated organisation, whose focus is on being effective, efficient and taxpayer-friendly. It is this approach that resulted in a negotiated settlement with Metcash. In the past, the organisation tended to be involved in prolonged litigation, which tied up resources for long stretches. SARS was confident that further litigation would only delay the recovery of outstanding taxes and duties. SARS also wanted to expedite the civil side of litigation in order to focus on the criminal investigation. Accordingly resources were freed up sooner to attend to other priorities and to improve turn around times.

As part of this new strategy, SARS reached settlements with a number of entities, amongst them Metcash, Accord Technologies, Profurn and Tayob.

The factors that lead to these agreements are as follows:

SARS is precluded from making any public statements about tax affairs of any taxpayer by legislation. Therefore all agreements with the client/taxpayer are confidential. The organisation can only make statements if so permitted by the taxpayer in question. As regards public companies, such as Profurn, the settlement reached was made public at their instigation. In this instance the Tayobs have also agreed to allow details to be published.

SARS has been investigating the Tayob family for a period of five years. In this period three members of the family have been sequestrated and accordingly no taxes or duties were recovered from the estates. One member of the family owes R17 million in taxes and duties and agreed to settle the debt over an agreed period of time. The terms of the agreement stated that full disclosure of the assets and the liabilities and all circumstances relating to the underpayment of the taxes and duties must be adhered to. Should it come to light at any stage that these terms are not adhered to the agreement ill become null and void. A further member of the family, although sequestrated, also undertook in writing to settle his debt over an agreed period of time.

SARS decision was made on the basis of the business assessment of the case. SARS is convinced it reached an agreement, which will bring more revenue into the fiscus and will cut litigation costs. Independent legal opinion and intensive consultation within SARS ensured that the final decision was the correct one in the context of the information available at the time.

SARS has an unyielding stance on corruption. The recent raids, which resulted in suspensions and arrests of people involved in fraud and corruption, including SARS officials, are clear examples of the organisation's commitment to rooting out corruption.

ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA



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