A case of dirty hands
CARMEL RICKARD: Tax dodge a costly mistake
If you set up an unlawful contract to dodge tax you would be well advised not to expect a court to enforce it, as a Namibian company has discovered
If someone were to have a guilty secret — particularly when it relates to a contract set up as a tax dodge — and yet goes to court to claim money from his or her partner in that secret, you have to wonder whether that person is incredibly stupid or incredibly greedy. In a recent Namibian case, Mvula Development Properties (MDP) went to court to have Africa Autonet (AA) ejected from the properties it had been renting from MDP, and for the outstanding back rent to be paid with interest. But then evidence emerged that the two close corporations (CCs) had signed two leases for the same property. Why was that? During cross-examination, MDP representative Erastus Mvula let slip that payment of the second lease was supposed to be "off the books" — which then left his counsel to concede that this was done to avoid paying tax. There were other disputes between the parties — for example, over who was the rightful owner of the property. What really mattered to the judge, though, was whether th...
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