21/07/2017 06:52 SAST | Updated 21/07/2017 06:52 SAST

Are The Guptas Running A Massive Tax Avoidance Scheme?

Evidence from the Gupta emails appears to suggest that the Gupta family are avoiding taxes.

Siphiwe Sibeko / Reuters
A general view of the Sahara computers headquarters, owned by the Gupta family, is seen in Midrand, Johannesburg, South Africa, April 14, 2016. REUTERS/Siphiwe Sibeko

Are the Guptas involved in a massive, complex tax avoidance scheme? Evidence in the Gupta emails suggests that this is so, Business Day reported on Friday.

Tax experts also told the paper that the transactions set out in the emails appear to be evidence of a complicated tax avoidance scheme known as staggering, or revolving loans. This reportedly involves moving finances and expenses from one company to another towards the end of the financial year. Loans are then reflected as assets and not taxable income.

Business Day reported that an email from Gupta associate Ashu Chawla to Atul Gupta, sent in December 2012, contains a spreadsheet containing information on loans totalling R1.6 billion to and from Sahara Computers. Gupta reportedly received personal loans worth R144 million from this, and he only paid back R13 million. Company loans to shareholders are partially taxable when interest-free, the paper reported.

Between December 2012 and September 2015, Atul Gupta racked up debts to Sahara Computers worth R140 million without repaying them. Sources familiar with SARS' processes told Business Day that this would make him an ideal candidate for a tax audit. Multiple loans were reportedly made between the family's other companies.

A tax investigation was instituted against the family in November 2013, but they were allegedly tipped off about this and it is unclear what the outcome was.

Sars and the Guptas did not respond to Business Day's questions.