RSA vs Wiese & Others: CASE SUMMARY
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RSA vs Wiese & Others: CASE SUMMARY
Case Information
- Court: The Supreme Court of Appeal of South Africa
- Case No: 1307/2022
- Applicant: Christoffel Hendrik Wiese and Others
- Defendant: Commissioner for the South African Revenue Service
- Judgment Date: 12 July 2024
- Download the FULL JUDGMENT
Judgment Summary
The Supreme Court of Appeal of South Africa (SCA) dismissed the appeal by Christoffel Hendrik Wiese and others in their dispute with SARS over the recovery of a tax debt. The appellants had challenged SARS’s interpretation and application of section 183 of the Tax Administration Act (TAA), which imposes liability on third parties who knowingly assist in dissipating a taxpayer’s assets to obstruct tax collection.
The case arose from a 2007 restructuring by Energy Africa, which triggered potential liabilities for capital gains tax (CGT) and secondary tax on companies (STC). Before assessments were issued, Energy Africa transferred its only valuable asset—a loan account worth R216.6 million—as a dividend in specie, rendering itself insolvent. SARS argued this action was intended to evade paying taxes.
The appeal centered on two questions:
- Whether a “tax debt” must be assessed and due at the time of asset dissipation under section 183.
- Whether evidence obtained during a section 50 inquiry under the TAA was admissible in subsequent proceedings.
The court held that tax debts arise upon the occurrence of a taxable event, independent of assessment. Assessments merely confirm and quantify pre-existing liabilities. It also ruled that section 56(4) of the TAA allows evidence from inquiries to be used in subsequent proceedings, subject to safeguards.
The judgment reaffirms SARS’s enforcement powers, clarifies the scope of third-party liability, and underscores the importance of proactive compliance by taxpayers and associated parties.
