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R88m in unpaid taxes: Sars vows to attach GladAfrica’s assets

Company submitted PAYE and VAT returns, but failed to make payments.
Image: Moneyweb

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.

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Instead of sponsorship if useless SA soccer, they should pay their taxes.

This is criminal. You work hard and the company just deducts the PAYE from your salary. Then instead of paying it over to SARS, they use it for other purposes. At the end of the day SARS still holds you responsible for failing to pay the PAYE.

You actually raise a good point here – I was thinking about it when I read the words ‘PAYE’ in the article. Despite the provisions of the Fourth Schedule of the Income Tax Act, SARS should grant GladAfrica’s employees an exception because the non-payment of PAYE (by GA) is something beyond their control.

If anyone ought to be punished, it is GladAfrica through fines and penalties.

“..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”

So SARS is not happy they didnt pay tax? Maybe SARS should be more worried about the rampant crime in their ranks of the regime

ANC members don’t have to pay taxes. The previous president dismantled the revenue service because they investigated him for tax evasion. There was the Tom Mojane episode when SARS protected people who showed SARS the middle finger.
“Corruption is a European concept”. – Jacob Zuma

“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.”

I hope I understood that statement INCORRECTLY. Shouldn’t the SARS be making it easier and cost-effective for non-compliant taxpayers to eventually cough up cash; in order to effectively implement its mandate of collecting taxes. Making it costly, as the commissioner, puts it would lead to non-payment or cries of insufficient cash funds to the requisite payment.

Its carrot and stick. If its too easy to rectify non-payment and non-compliance, then people will take the gap and hope not to be caught.

Billing a single client R100 million per annum for 5 consecutive years (2017 to 2021)?… Glad!

Deferring the PAYE@25% and taking a 12,5% discount while holding in an interest-bearing money market account?…. Glad to be in Africa!

Submitting returns but withholding payment like a red herring for client’s overseer, the auditor-general and his uber- meister the minister of finance who then freeze your assets, most likely removing the account from your not so glad grip?….Glad it was not me!

End of comments.

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