INVESTING | August 23, 2017 10:37

Revealed! Super-rich Gupta brothers pay very little personal income tax

EDINBURGH — The Gupta family and their friends ride on the backs of South African taxpayers at every opportunity. The Gupta family has a business empire built on sucking funds out of South African state entities and has used political contacts to gain South African citizenship, yet the family members don’t appear to be patriotic when it comes to paying their fair share in tax. It has emerged that the super-rich Gupta brothers declare modest incomes in relation to their conspicuously ostentatious lifestyles and therefore pay very little personal income tax. These revelations come on the back of evidence that the Gupta family used taxpayers’ funds to pay for an extravagant family wedding at Sun City and then dodged tax on this money – all as auditors KPMG watched while enjoying taxpayer-funded hospitality. – Jackie Cameron

By Thulisizwe Sithole

The Gupta family has been catapulted into the ranks of South Africa's richest, along with Richemont boss Johann Rupert and other wealthy business people. But they pay only a fraction of their income in tax and have declared modest incomes in relation to their conspicuous spending.

The Gupta brothers claim they employ tens of thousands of people through various entities. They live in a luxury family compound that is the size of a boutique hotel in the upmarket suburb of Saxonwold.

The Guptas reportedly own a private jet and pay for extravagant weddings – all on the back of deals that have sucked an estimated R100bn out of state-owned entities.

Atul Gupta was placed among South Africa’s 10 richest men on the Sunday Times Rich List in 2016 and named as South Africa's richest black businessman.

Journalists sifting through the #GuptaLeaks have uncovered emails showing that the South African Revenue Service (Sars) accepted declarations from them indicating that they earnt about R1m and less each year from 2011 to 2013.

amaBhungane and Scorpio journalists report that there is evidence in the #GuptaLeaks emails showing that, between 2011 and 2013, SARS accepted declarations from the three Gupta brothers to the effect that they earned R1-million or less each per year - and paid personal income tax accordingly.

SARS documents from the #GuptaLeaks provide evidence that Ajay, Atul and Rajesh (Tony) Gupta declared taxable income which rarely exceeded R1-million per year, on which they paid PAYE and nothing further, say the investigative team.

Guptas taxable income R1 million. Accumulated assets R50 billion.VAT refund R170 million.

NB @TreasuryRSA does not donate – they earned it

— Maggs Naidu (@maggsnaidu) August 23, 2017

"In 2011, for instance, Rajesh Gupta declared R965,000 in taxable income, with R315,670 going to PAYE. In 2012, Ajay Gupta declared R935,000, of which R299,196 was taxed. In 2013, Atul Gupta declared R1,087,616, of which R376,186 went to PAYE."

The Gupta brothers' tax-dodging ways will come as no surprise to South Africans closely following revelations spilling out into the public domain about state capture and corruption.

It has emerged that South Africans picked up the tab for an extravagant Gupta family wedding at Sun City. Politicians, civil servants, media company bosses and state entity directors believed to be influential in oiling the wheels of commerce were among the guests put up for several days and entertained at South African taxpayers' expense. Meanwhile, auditors KPMG watched as Gupta-linked parties funnelled money from state coffers in a series of complex transactions to pay for the wedding.

The revelations that the Gupta brothers pay very little income tax will anger many South Africans, who are already outraged at high income tax rates and the blatant corruption and abuse of state funds by President Jacob Zuma and his friends.

The story also underscores concerns that the Sars applies different rules to Zuma’s associates and other South Africans.

Keep up with news on Gupta tax-dodging and state capture here on BizNews: • KPMG links exposed! 70 companies turning blind eye to Gupta state capture

South African business leaders have turned a blind eye to the role of KPMG in aiding and abetting the Gupta family, which effectively controls the ruling ANC through President Zuma. BizNews publishes the list of companies still doing business with KPMG - even though the Big Four consultancy appears unrepentant about its relationship with the Gupta family.

• KPMG-Gupta links: Sygnia's Wierzycka fires KPMG for 'looking the other way'

Magda Wierzycka is the first leader in the business sector to take a firm stand against the big corporates who have benefited from state capture. Wierzycka said in a recent interview on television that she was prepared to be outspoken, even though this is not the done thing in the corporate sector, as she is fully committed to seeing a better future for South Africa. Meanwhile, KPMG leaders appear to have their proverbial heads in the sand, opting for a "silence is golden" approach to managing their reputation in this crisis.

• Sygnia CEO Magda Wierzycka: 4 big questions KPMG must answer or it's fired!

Magda Wierzycka is one of South Africa's most successful female entrepreneurs, and arguably its most influential in the financial services sector. Wierzycka has also become one of the most outspoken South African CEOs on the subject of corruption and the abuse of the disadvantaged. Earlier this year, her criticism of asset management rival Allan Gray ultimately led to a change in the boardroom of Net1 - a Nasdaq-listed company accused of riding on the backs of welfare recipients. Now Wierzycka has taken action against Big Four accounting firm KPMG.

• Just not good enough KPMG! CEO Hoole ducks, dives over Gupta scandal

While South Africans react with outrage over the vast and growing body of evidence that multinationals like KPMG and McKinsey have been complicit in the Gupta state capture campaign, the leaders of these companies are sitting pretty it seems. For example, neither the police nor the Financial Intelligence Centre appear to be investigating damning allegations that KPMG was aware of tax evasion and moneylaundering by the Gupta family. What's more, KPMG CEO Trevor Hoole and team don't seem to think they owe South African taxpayers a detailed explanation for the involvement of KPMG in Gupta affairs.

• Meet unrepentant Gupta tax dodge 'lapdog' Moses Kgosana, KPMG heavyweight

Moses Kgosana was about to take the chair at Alexander Forbes Group Holdings when his name emerged in secret emails leaked from the heart of the Gupta family empire. He has been linked to an accounting manoeuvre that facilitated state payment for an extravagant private event. Read more.

• Gupta tax dodge scandal: 7 questions KPMG bosses DON'T want to answer

Auditing firm KPMG has been thrust into the limelight for its relationship with the Gupta family - Indian immigrants at the centre of a state capture scandal that has engulfed South Africa. KPMG helped the Gupta family divert taxpayers' funds to pay for an extravagant family wedding at Sun City and went one step further in ripping off taxpayers by helping the family to avoid paying tax on the funds. Read more.