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Sars gets kicked to touch in Lesotho number plate case

Its appeal against a high court ruling was thrown out last week – and a multi-billion-rand court action is now planned against it.
Sars, and thus taxpayers, must now repay more than R1m in costs to the applicant, and this is a fraction of what Sars itself has run up in this frivolous case. Image: Supplied

It’s official: owners of imported vehicles sporting Lesotho, Botswana and eSwatini number plates can drive freely and unhindered on South Africa roads.

Last week the Supreme Court of Appeal (SCA) threw out an appeal by the South African Revenue Service (Sars) against an earlier judgment in the Free State High Court, brought by Ficksburg resident Joaquim Alves, whose Nissan Serena station wagon was impounded by customs officials in 2019.

The case also has huge potential impact on local car manufacturers who rely on import protection from the kind of cheap Japanese-made imports found in neighbouring countries like Lesotho and Botswana.

Alves’s vehicle, which has a Lesotho number plate, was being driven by a friend in the Lesotho border town of Ficksburg when customs officials stopped the driver and asked to see the import permit.

Alves raced to the scene and argued with the customs officials that the vehicle was legally registered in Lesotho, and hence no import permit was required.

These arguments fell on deaf ears, and the customs officials impounded the vehicle.

Believing the law was on his side, Alves went into the municipal pound in Ficksburg to retrieve his vehicle.

A few hours later the police arrived at his door and charged him with the theft of his own vehicle.

They locked him up in a cell for the weekend, until the local magistrate ordered him released on the Monday morning and later ordered that the vehicle be released.

Moneyweb covered the story as it unfolded.

A furious Alves decided to take Sars to court, and he won his case in the High Court in Bloemfontein in 2019. Sars appealed the case all the way to the SCA, losing all the way.

The SCA ruling last week reads: “The application for special leave to appeal [by Sars] is dismissed with costs on the grounds that the requirements for special leave to appeal are not satisfied.”

Mkhosi Radebe of MC Radebe Attorneys in Pretoria, who is representing Alves in the case, says Sars is now out of options to take its legal argument any further, though there is a possibility it may ask the SCA for a “reconsideration” of its ruling.

Mkhosi Radebe (left) and Joaquim Alves celebrated the previous high court victory during the original Covid-19 lockdown. Image: Supplied

“[It] is an outrage that this kind of reckless and adventurous litigation by Sars is being paid for by taxpayers, with no consequence for the bad legal advice it is following,” says Radebe.

“Who in Sars is making these decisions and why are they not being held to account? Let’s be clear about this: Sars is not above the law and must be held to account for its behaviour and the behaviour of its officers.

“What happened to my client Mr Alves is an act of thuggery, and I must emphasise that his vehicle has still not been released by Sars,” says Radebe.

“Our costs so far in this case, which Sars – and therefore taxpayers – are required to repay are north of R1 million, which is a fraction of what Sars itself has run up in this frivolous and wasteful case.

“Taxpayers should be asking how responsibly Sars is spending their hard-earned money by chasing down futile cases like this.”

Alves (left) and Radebe celebrated the SCA victory via Zoom. Image: Supplied

Ironically, the original cost of vehicle was about R40 000, a fraction of the legal bills spent on the case – which Sars must now refund to Alves.

In its court filings, Sars argued that Alves’s vehicle had been seized in terms of Section 88 of the Customs and Excise Act, and that it had acted lawfully and reasonably in terms of the act. It also argued that the seized vehicle was an import for which an import permit was required.

Alves’s legal team replied that the customs officials had no reasonable suspicion that the act was being violated when they stopped the Nissan Serena in the first place, and the indefinite seizure of the vehicle was unlawful.

Lesotho falls under the Southern African Customs Union (SACU), which links member states by a single tariff and with no customs duties between them, and could therefore travel freely on South African roads.

Section 88 of the Customs and Excise Act allows any officer, magistrate or member of the police to “detain any ship, vehicle, plant, material or goods at any place for the purpose of establishing whether that ship, vehicle, plant, material or goods are liable to forfeiture under this act”.

Radebe says this clause is so badly worded and open-ended that any South African driving their locally-purchased vehicle could be subject to the same treatment as Alves, which would violate constitutional protections against arbitrary deprivation of property.

The Free State High Court’s finding, followed by the SCA ruling, provides clarity on the existing law rather than breaking new legal ground, says Radebe.

Sars official reinstates theft charges against Alves

Alves told Moneyweb that one of the customs officials involved in the case has reinstated theft charges against him for removing his own car from the Ficksburg pound.

“This is just malicious intimidation by a Sars official who has been caught out acting unlawfully himself, now trying to save his reputation,”  he says.

“How can you be charged with stealing your own car? And how can it be theft when multiple judges have ordered Sars to return the vehicle to me, and Sars has yet to comply.”

Radebe says one positive outcome from the case is that there are fewer seizures of vehicles with foreign number plates by Sars, and several vehicles under seizure are being returned to their owners.

“The case has definitely had some positive effects,” he says.

“The law has now been clarified. If you own a vehicle, no matter where it was manufactured, and it has been imported into the SACU area, you are free to drive it without hinderance anywhere in the common customs area.

“We are now preparing a class action suit against Sars for the tens of thousands of vehicles unlawfully impounded over the years.”

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SARS is getting a bit too big for their shoes lately. They need to brought down a notch or two.

Too much power and a bad attitude!

AND some crooked officials wanting to line pockets of crooked attorneys to waste taxpayers money

To a certain degree I agree with Illphil (I hope you feel better soon), but I am thinking more along the lines of that this was a shakedown that got completely out of hand and now they are trying to cover it up.

Go for the jugular guys !!

Clearly a case of SARS clutching at straws. Just goes to show how desperate SARS is for revenue and is prepared to go to such lengths in an attempt to secure revenue from the small man.

Hey SARS, how far are you with the lifestyle audits of the elite ZUPTA clan members?

SARS is becoming a vehicle for anc looting. They are hassling citizens with every and anything they can dream up.

Cant help thinking the anc deployed cadre that wetter guy has everything to do with this.

#VoetsekWetter & #Voetsekanc

When you need the courts to protect you from government you just know the end is near!!!!

They always have been complicit in the ANC looting program !!

Any bets that the wording of Section 88 is to be changed within the near future?? It’s an open secret that SARS and the Government will do whatever is needed to ‘collect’ from the S.A. citizen.

Maybe they can now refocus their considerable efforts going for the real tax offenders, oh I don’t know, maybe like Ace, Watson, some fellow called Gupta, et al.

Eddie

– Your act say’s pay up in 10 day’s or else, hope you reciprocate? Values you advocate come to mind Honest, Just, Equitable ??
– The Employee that locked Alves up of the weekend, will he get similar weekend treatment , or is employees a better class than the citizen that pay his taxes
– Hope Mr Alves can legally throttle your employee, that nice phrase in the act come to mind Jointly and severally
– Mr Alves, we salute you , standing up to the gestapo and winning, you Sir are a worthy recipient of the Honorius Crux Medal

I don’t blame SARS one bit! Lesotho has long been used as a loophole to avoid paying import or export duties to our fiscus. It’s about time that this is stopped, especially when SARS coffers have been so heavily depleted by those that will find any way to avoid their taxable responsibilities. I just hope that SARS are able to put as much effort into reclaiming monies owed by the Guptas and their pals most of which resides happily in Dubai or Bitcoin it seems!

I would have thought an import into Lesotho as a SACU member would attract the same tariffs as an import into SA ; which would be paid into the SACU customs pool, of which SA takes its negotiated share ? If there’s an evasion problem it should be dealt with at the SACU port of entry (not many imported vehicles come direct into Maseru by air !).

Or isn’t this how it works ?

Not correct. Ever heard of the SACU? Once the goods has been imported into the SACU region, excise duty is paid, once and once only. There is not multiple duty payable every time the goods cross borders within the SACU.

Looks like “common sense” isn’t so common at SARS. I can’t imagine what they were thinking in this case. The car was clearly not being imported.

Nothing like a good hiding for Kieswetter-the Beria of the ANC regime

Commenting on this sub-heading: “The case also has huge potential impact on local car manufacturers who rely on import protection from the kind of cheap Japanese-made imports found in neighbouring countries like Lesotho and Botswana.”
The general rule of thumb for the amount of taxes,levies,VAT, surcharges etc contained in the selling price of a new car in SA is 40 percent. That is to say: 60 percent is car, 40 percent is taxation. There are obviously differences between net importers and local manufacturers that can claim export credits, but 40 percent is a fair working average.
Perhaps if SARS was less greedy in the first place, there would be less resistance from consumers?
But impounding a car registered in a neighbouring country is just plain stupid. That official should be sued in his personal capacity, I believe.

One thing is not clear.Was the car RHD or LHD.If the latter does that then mean if I import a LHD vehicle legally in Lesotho that I can now drive the said vehicle in South Africa

Japan drives on the left side of the roads. All these Japanese imports are RHDs.
SA should allow those Japanese imports of 2nd hand cars. They are about all in very good condition, good value for money. All those import restrictions and duties do very little, probably more harm than good when one would have a decent look at the economy, employment as a whole.
Problem in SA is relatively too high wages, poor productivity and labour ethics and discipline.
Tackle these first and foremost, not more bureaucracy and complicated expensive incentive schemes and import duties and restrictions.

This ordinary bloke from Lesotho is owed a formal apology from our government!

What a disgrace. How can SARS waste so much money on legal fees when any Joe Soap knows who is right and who is wrong in this case without even thinking too hard?

When has any arm of Government ever cared about how much it costs the Tax payer? That premise is so far removed from reality, the words make no sense.

So I can register a vehicle in Lesotho and drive it in SA?

That would be a huge saving to the whole of SA, not so?
As local car carry huge premiums.

As far as I understand it only a Lesotho citizen, or somebody with a permanent residence or an official business in LS can have a car registered there. The owner is then allowed to drive it anywhere, at least in SADC territory.

Correct…thanks for pointing this out. Apparently this cars driver ( in the story) had “borrowed” the car from his friend – both residents of SA ( Fiicksberg is in SA on Lesotho border) whilst the car was registered in Lesotho! Sounds dodgy to me! Perhaps the town should be renamed Fixberg andi it becomes the ANC’ headquarters!!

Yip, that’s what we can do – we get ripped off by local dealers – why the price protection, I don’t know.

Ever took your “well cared for” car for a trade in – and see what they offer you?

its shocking

In theory (according to the regulations), the registered owner must be resident in that same country.

I say “in theory” because I know of people who are SA citizens and resident in SA, but have Lesotho registered vehicles. However this may be that this is during the period of grace for change of registration.

Mactheknife must work for SARS , people look for loopholes when taxes are draconian , 40 % on vehicles is crazy and so we see thousands of cars driving around that should have been scrapped , it might be better if we had a public transport system that works but in SA a car is a necessity not a luxury

I dont t work for SARS – I’m just a retired “average Joe” who believes that the only thing making SA different from any other African country…is its tax base. Without taxes, we won’t have a country….

I agree with your observation regarding public transport….the ANC have destroyed Transnet, ( amongst other things) in favour of the taxi industry ( the owners of which probably do not declare their income so avoid msking a much needed contribution to our fiscus)

Lots of vehicles from Japan are sold into Zimbabwe or Mozambique because the Japanese Shaken System of vehicle inspections every year makes it uneconomical to have a vehicle older than three years. These vehicles are sold off usually at a low mileage.Not easy to get in RSA, due to protection of local manufacture,but we see lots of models that are not available here driving along N4 from Mozambique. The Nissan That Mr Alves has isn’t common here

Talk abut shooting yourself in the foot. How stupid can you be? The problem is that SARS thinks that arrogance is the way to deal with the public. ” Your tax matters” Yes, it does, so they can pay the legal costs they incurred in a frivolous case against you or give it to a government that will steal it from you.

It’s very appalling that taxes on new vehicle purchases are as ridiculous as 40%. In a country where the government “claims” it’s trying to alleviate poverty and unemployment . In a country where there is no efficient transport system or are we to call the gautrain with its 3.5 destinations an efficient system? High vehicle prices means high insurance premiums and all leaves the average citizen worse off.

How can the cost of a used car in SA be far higher than the cost of a new one, thesame vehicle in the U.S, Europe or even Asia?

South Africa has more than needed supply of “employees”, what it needs desperately are “employers” and enterprenueurs. A motor vehicle is needed in most businesses and the high cost of these impacts on businesses.
The “so called” car industry being protected employs far less people compared to the number of people being negatively impacted by this insane car prices.

I run a business outside the shores of SA and I can confidently say it’s way way cheaper running a business there than it is in SA and that holds for most other African countries.
The economies might not be as structured as it is here at home but small businesses owned by individuals are the heart beat of these economies and if SA is really serious on uplifting it’s masses out of poverty, the cost of doing business must be reasonable for the ordinary man to even consider that option.

Vehicle cost in most “developed” countries are way lower than it is here, then most “developing” countries atleast allow importation of used vehicles subject to conditions that guarantees the condition of these vehicles making vehicle cost in these countries very very affordable, SA does not fit into any of these 2 categories in terms of car affordability, the question then is, where does South Africa belong? And does the government even understand the implications of things like this?
What the government is saying about promoting sme’s seem very divergent from the policies it has in place.

The government needs to start implementing policies that impacts on the lives of the average person on the ground.
They need to stop concentrating on international accolades ( BRICKS nation member, Biggest economy in Africa,, etc), because the truth is; the average person on the ground has seen little to no difference in their lives and their daily struggles has gotten worse over time. Enough of tenderpreneurs, more of small businesses and growth of informal sectors.

Please show me the civil servant in this country who actually feels bad about wasting money on litigation.

I suspect, just another case of an official trying (unsuccessfully in this case) to solicit a bribe.

Why make a civil suit against the official that started this? Then at least someone will be held responsible.

End of comments.

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