MASERU — The Lesotho Revenue Authority (LRA) is investigating popular businessman Yan Xie (pictured) for allegedly evading tax, the Lesotho Times can reveal.
Xie, a Mosotho of Chinese descent who runs Jackpot Supermarket and a string of retail shops in Maseru, allegedly owes nearly M20 million in unpaid taxes.
The LRA believes Xie routinely understated his obligations to the tax authority and paid far less than what he actually owes.
Xie is a shareholder in Meraka Lesotho Abattoir, the country’s only licenced abattoir, and has also been linked to several lucrative government tenders.
He also owns two construction companies.
Xie, who is popularly known as John, says he is not linked to these companies as a “shareholder” but as a “financier”.
The Lesotho Times understands that the LRA started investigating Xie sometime last year.
The LRA suspects that Xie has been understating tax obligations for Jackpot Supermarket, his other retail shops and the two construction companies.
He is also suspected of making false customs declarations for goods that his businesses import from South Africa.
On Thursday morning police officers and tax revenue officials, armed with a search warrant, raided Xie’s offices at Jackpot Supermarket in search of evidence.
The police cordoned off the shop’s premises to stop customers from entering.
Employees were assembled in the shop and had their mobile phones briefly confiscated.
Xie’s mobile phone was seized and by yesterday night it had not been returned to him.
A source who was part of the raid told this paper that the investigators impounded “box-fulls of documents”.
Those documents, he said, included sales records, purchase records, ledgers, the pay roll and bank account records.
They also took the supermarket’s computers, the source said.
The source said the investigations have now been widened to Xie’s other businesses which could also be raided for evidence.
The LRA spokesperson, Pheello Mphana, said he could not comment on investigations into Xie’s affairs because the law does not allow the revenue authority to talk about individual taxpayers.
“The law that governs our operations does not allow us to give out information on individual taxpayers,” Mphana said on Tuesday.
But a source close to the issue said the LRA’s compliance department has been monitoring Xie’s tax affairs since mid last year.
“We started monitoring his business transactions last year and we suspect that he is not paying what he really owes as a taxpayer,” the source said.
“We suspect he has been understating Value Add Tax (VAT) and income tax obligations for his companies for some time now.”
The source added that the LRA suspected that some of the information Xie submitted in his tax returns was not accurate.
“There seems to be a mismatch between what he declares to have imported from South Africa and what he then sells. We suspect some of his declarations at the border are highly understated to avoid paying tax,” he said.
“We suspect that the figures that he gives us as the tax authority do not tally with the amount of things that he sells and imports.”
“We (LRA) then consulted the police department to help us with their expertise. A search warrant was issued and all his stores were raided. Some business papers were seized,” the source added.
Xie told this paper that he had not been told why he is being investigated. “They came and took all the documents, the computers and my cellphone,” Xie said in an interview on Tuesday.
“I was not informed why they took them. I am still waiting for someone to tell me what is going on”.
He however said he was not worried because all the companies he “finances are paying their taxes”.
“I am happy that they are investigating us. We are paying taxes. We pay millions in taxes,” Xie said.
He also confirmed that Jackpot Wholesale in Maseru Industrial area, another business he claims he does not own but finances, was also raided.
Xie is the second popular businessman whose tax affairs have come under scrutiny from the LRA.
In January prominent businessman Osman Moosa and his son, Shameen, were put on trial for evading tax.
Moosa and his son are facing 180 counts of tax evasion, fraud and theft.
The case is pending in the High Court.
