Former national cricketer Garth le Roux and companies under his control never paid a cent of tax on property-sale commissions totalling just over R1,9-million, Cape Town’s Wynberg Regional Court heard on Wednesday.
Le Roux and his accountant, Deon van Heerden, have pleaded not guilty to 48 counts of income-tax and VAT fraud. Le Roux alone faces a further charge of contravening exchange-control regulations.
Arguing against an application for their discharge at the end of the state’s case, prosecutor Bronwen Hendry told the court that a situation such as the one the two men engineered was ”any taxpayer’s dream”.
”But the court will decide whether it believes this fairy tale, or better yet, whether it believes Van Heerden, the accountant, could wave his magic wand and make it all happen,” she said.
The state opposed discharge on all counts except one, relating to the creation of an allegedly false loan account.
Le Roux’s company, Garth le Roux Marketime, which is also listed as an accused, became entitled to the commissions when he acted as agent for the sale of properties at the prestigious Fancourt golf estate outside George.
However, the money was never paid to Marketime. Instead, Fancourt gave equivalent discounts on the purchase of other properties on the estate to two other companies of which Le Roux was a director.
His defence team has argued that the money never actually accrued to Marketime in terms of the Income Tax Act, and that Marketime was therefore never liable to pay tax on it, or alternatively that if this approach was wrong, it was an honest mistake.
However, Hendry said on Wednesday that Marketime would not have been able to give the money away if it did not have it, or an unconditional right to it, in the first place.
She said there was no evidence before the court that the transactions, which involved three separate amounts of commission, were a mistake.
The court also had to have regard to the fact that giving away the benefit to the other companies made no commercial sense, and that Le Roux was at all stages the alter ego of all the entities involved.
None of the three commissions were ever declared as income by any of the companies, nor was VAT paid over. ”They vanished for tax purposes,” Hendry said.
It had been argued that there was a measure of tax naivety on Le Roux’s part — though the facts suggested otherwise — but it was difficult to see how Van Heerden, who had himself worked for the South African Revenue Service (Sars) for a period, really believed that this amount of commission could be untaxed.
She said there was no direct financial benefit to Marketime in not collecting VAT on the sales from Fancourt management and paying it over to the receiver, but the ”careful and astute” Van Heerden had realised that paying the VAT could set off alarm bells at Sars and expose the non-payment of income tax.
Hendry also said there had been no explanation of Marketime’s double claim from Fancourt of a R112 000 commission on one house, a claim which a reasonable person could infer was made with intention to defraud.
She continues her argument on Thursday. — Sapa