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The South African Revenue Service (SARS) has achieved a significant legal victory against businessman Roux Shabangu, marking a major step in the country's fight against tax evasion. The Gauteng North High Court delivered a series of judgements that underscored the commitment of the revenue service to pursuing individuals and entities that neglect their fiscal obligations to the state.
Commissioner Edward Kieswetter has expressed satisfaction with the set of court orders that reaffirm SARS’ dedication to uphold the nation’s tax laws. The case originated when SARS presented a formidable challenge against Shabangu and his various companies involved in construction and property for failing to settle substantial tax dues that had accumulated since 2019.
SARS deployed Section 163 of the Tax Administration Act to secure a Preservation Order, targeting Majestic Silver 275 (Pty) Ltd, a primary property holding entity linked to Shabangu. The order extended to Shabangu himself and members of his family, all trustees of The Roux Shabangu Family Trust.
Despite Shabangu's attempt to obtain business rescue for Majestic Silver 275, SARS successfully contested this move. In February 2023, a provisional Preservation Order was granted by the court, permitting SARS to dismantle the temporary legal shield that business rescue would have provided.
Subsequently, in April 2024, SARS solidified its pursuit with a final Preservation Order against Majestic Silver 275 and associated respondents. This culminated in nullifying the company's business rescue status and initiated a transition towards liquidating Shabangu’s companies and moving towards the sequestration of both his personal estate and the family trust.
The courts resolved in favor of SARS yet again in September 2024, delivering decisive liquidation and sequestration rulings. These included a definitive liquidation against one firm, with provisional orders for another company, Shabangu, and trustees of the family trust.
This legal victory is not just about recovering taxes but also serves as a stern warning against the abuse of discretionary trusts to evade taxation. Commissioner Kieswetter's assertive voice reflects the authority's unyielding intent to combat tax evasion, underlining the significance of respecting the country's financial laws.
SARS' successful legal action against Roux Shabangu symbolizes a robust enforcement framework aimed at promoting tax compliance across South Africa. By piercing through the corporate veil, SARS demonstrates that all individuals and entities must fulfill their financial commitments to the fiscus without exception.