The assets of engineering consultant GladAfrica Management Services will be attached by the sheriff following the company’s decision to submit pay-as-you-earn (PAYE) and value added tax (VAT) returns without making payments, the South African Revenue Services (Sars) reported on Tuesday.
Sars says it obtained a civil judgment and writ of execution against the company owing to R88 million in unpaid taxes. The writ of execution was issued on August 10 and will be followed by the attachment of assets by the sheriff.
In 2018, GladAfrica was involved in a controversial contract with the City of Tshwane under the leadership of former city manager Moeketsi Mosola, where R12 billion was awarded to the firm for a project management tender. However, the tender was cancelled by mutual agreement the following year after the Auditor-General declared it irregular.
Since the inception of the project in 2017, the city spent nearly R500 million on GladAfrica.
“Sars is becoming increasingly aware of the tendency by companies to submit returns without making the corresponding payments. Such non-compliance will not be tolerated as it is a serious threat to the revenue collection mandate of Sars,” said the revenue service’s commissioner Edward Kieswetter.
Kieswetter says one of the organisation’s strategic objectives is to make it difficult and costly for taxpayers who do not comply with their tax obligations, regardless of who the taxpayer is.
“Companies and their directors must note that Sars will take all action legally possible to ensure compliance and ensure that VAT and PAYE payments are made.
“As per third party agreement, PAYE is collected from employees on behalf of Sars and is not for the benefit of the company. To then utilise collected tax for other purposes [rather] than pay it over to Sars, is a criminal offence,” Kieswetter added.
GladAfrica is yet to respond to Moneyweb’s questions.
Palesa Mofokeng is a Moneyweb intern.