Editorial: Taxing the whales

Carr and other celebrities had set up fancy structures to ensure that they paid next to no tax.

Back home we have the hysterical case of Christo Wiese, who is so wealthy that Forbes ranks him in the top 400 individuals globally with a net worth of $3.1-billion (R25-billion). Wiese built his fortune on providing cheap clothes to the country’s poor through the Pep chain. He is also a significant shareholder in Shoprite Checkers, another of the continent’s success stories.

He is an entrepreneur of note, but strangely not averse to carrying his loot around with him. He was famously found in April 2009 to be carrying about R7-million in cash in two suitcases when boarding a plane at London City Airport for Luxembourg. The cash was confiscated, but Wiese was able to get it back after legal proceedings.

Reports by the Sunday Times and City Press said the cash-in-suitcases incident had drawn the interest of the South African Revenue Service, which has been investigating Wiese and a maze of companies associated with him for non-payment of tax. They said Sars last year presented Wiese with a tax bill of R1-billion and that there may be a further bill of R1-billion, including penalties. Wiese has said he has nothing to hide and is unaware that he owes “those sorts of numbers”.

Sars is forbidden from talking about individual cases, but is understood to be investigating the affairs of up to 200 superwealthy South Africans. This includes the practice of using fancy Jimmy Carr-like structures to reduce their taxes drastically.

The new South Africa, we should not forget, was founded on the basis that those who had benefited from privilege in the past would pay to fund the reconstruction and development of the country. Tax is a private matter, but the Wiese case suggests that there is a strong case for tax whales –  those who have built outsized positions on money they owe to the taxman –  to have their affairs publicised so that we can all see just how funny this business is and bring moral and political pressure to bear along with legal instruments.

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