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SARS hits Guptas with major tax bill

Gupta Brothers

Sept. 24, 2020 2 min read

2 min read

A tax audit has pried open new details of the money laundering structure used by the crime family to fund the infamous wedding in Sun City with cash from the Estina dairy project. It turnsout the wedding was only part of the story.

On 19 August, the South African Revenue Service (SARS) sent two “audit findings” letters to a lawyer representing Linkway Trading,  a low-key cog in the Gupta family’s money laundering machinery. The SARS letters were to inform Linkway that its assessments for income tax and VAT had been massively adjusted for the tax years 2013 to 2016.

SARS alleged that Linkway had effectively underdeclared taxable income by R197.5-million and had reclaimed R24.5-million in VAT it was not eligible for. That translates into a tax liability likely in the region of R80-million, excluding interest and penalties.

Linkway’s main claim to fame is being the conduit through which R30-million came into the country from Dubai to pay for the infamous and absurdly lavish Sun City wedding of 2013.

The extravaganza was claimed as a business expense using some creative accounting and the connivance of KPMG audit partner Jacques Wessels, as previously reported by amaBhungane and our #GuptaLeaks partners.

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The money was diverted from the Estina dairy project in the Free State before being routed through a Dubai company called Accurate Investments back to Linkway in South Africa. SARS has now finally taken action against this brazen abuse. The Independent Regulatory Board for Auditors deregistered Wessels in 2019 for his role in the scandal.

Part of SARS’ threatened adjustment to Linkway’s taxable income is that the entirety of the wedding expense will be disallowed as a “business expense” and become taxable. “It appears that Linkway Trading was merely a conduit or directly and indirectly acting as an agent of Islandsite and the four directors,” SARS notes in one of its letters.

Linkway is a subsidiary of Islandsite Investments 180, the company that also owns the Gupta family’s luxury properties, jet and other assets in South Africa. The four directors of Islandsite referred to by SARS are two of the Gupta brothers, Rajesh “Tony” and Atul, and their wives, Arti and Chetali. DM

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