The most scandalous family in the present day South Africa may be nursing a ploy underneath their sleeves. Evidence in the leaked Gupta e-mails points to a complex multibillion-rand tax-avoidance scheme with family patriarch Atul Gupta at its centre.
Several tax experts told The Times the picture painted by the transactions captured in the e-mail leak point to a practice known as “staggering” or revolving loans. The Guptas appear to have used personal and inter-company loans to and from their companies, many of which are offshore.
The practice involves shifting finances and expenses from one company to another prior to the end of the financial year. The loans are then reflected as assets and not as income, which is taxable.
The loans enable a company to reflect a particular financial status at year-end and move money offshore to where entities hold accounts.
The Guptas failed to respond to questions on the allegations this week and the SA Revenue Service (SARS) failed to answer questions in detail.
An e-mail sent from Gupta lieutenant Ashu Chawla to Atul Gupta on December 18 2012 contains a spreadsheet with detailed information on loans to and from the family’s Sahara Computers totalling more than R1.6-billion.
Of this, Atul Gupta, a South African resident and director of Sahara Computers, received personal loans from the company totalling over R144-million.
The company’s financial records show he had paid back only R13-million.