By Akani Nkuna
The South African Revenue Service (SARS) has rejected claims by former Passenger Rail Agency of South Africa (PRASA) chief executive Lucky Montana that its efforts to enforce tax compliance against him amount to a political witch-hunt, and that he was kept in the dark about his alleged tax transgressions.
Speaking at a media briefing on Saturday, SARS Commissioner Edward Kieswetter detailed the steps taken by the revenue authority to notify Montana of its intention to recover tax debts, following his failure to submit income tax returns between 2017 and 2019.
Kieswetter said SARS initiated an audit into Montana’s tax affairs covering the period from 2009 to 2019.
Montana was informed of the audit in November 2020 and given until December that year to provide the required information.
Upon his request, the deadline was extended to 1 February 2021.
“SARS found that Mr Montana had unlawfully evaded his tax liability by under-declaring taxable income he received from various sources over the relevant audit periods. This constitutes a legal contravention. As in the ordinary course for any taxpayer in such circumstances, Mr Montana was afforded 21 business days to respond to the audit findings,” Kieswetter said.
Following the finalisation of the audit in 2022, Montana was found to owe R28 million in capital and penalties accumulated over the decade between 2009 and 2019.
Kieswetter quoted a letter Montana wrote in September 2022, in which he challenged a default judgment SARS had obtained against him, demanding payment of more than R44 million to settle his tax debt.
In the letter, Montana claimed he had been advised that the judgment was a “misrepresentation to the High Court” and could be rescinded.
Earlier this week, Montana laid criminal charges against Kieswetter for fraud, perjury, abuse of power, defeating the ends of justice, and violating the Tax Administration Act.
He alleged that the High Court “never issued such a judgment or court order” in any matter between him and SARS.
“The key thrust of my criminal complaint is simple: SARS is in court to sequestrate me on the basis that it obtained a default judgment against me on 11 August 2022 in the sum of R44,927,320. But the High Court never issued such a judgment. This is fraud and perjury,” Montana wrote on X (formerly Twitter).
Montana further claimed that his legal representatives had repeatedly requested a copy of the default judgment on which SARS’s sequestration application is based, but were instead provided with internal SARS documents unrelated to the case.
He added that “the case number used by SARS in their documents also does not match the matter under review,” and that “the Sheriff and police raided my family homes without a court order.”
In July this year, the court granted SARS’s application to strike out Montana’s allegations of political witch-hunt from his replying affidavit and dismissed his application for condonation with costs. Montana has since lodged an appeal, which is expected to be heard soon.
In the meantime, Montana has submitted a compromise offer of R5.4 million to SARS to settle his total tax debt, which currently stands at over R55 million.
Kieswetter said Montana’s public statements were “regrettable” for someone seeking to negotiate a settlement, warning that his remarks “bring the institution into disrepute and cast unwarranted doubt over its legitimacy.”
“Dependent on the compromise process Mr Montana initiated and the outcome thereof, SARS intends to set the sequestration application down for hearing in the High Court. Significantly, SARS’s actions against Mr Montana have throughout, and will continue to be, subject to judicial scrutiny,” he added.
Montana is expected to address the media on Monday to respond to SARS’s allegations.
“I’ll listen to what the tax authorities had to say tomorrow. I sent a letter yesterday rejecting their ultimatum. I will not interrupt my weekend with family. I intend having my own presser on Monday to respond and outline how I will deal with the tax issue moving forward,” he posted on X.
“I do not owe SARS even a cent. I will address all the issues tomorrow during my presser. Tomorrow, I have my own Special Media Briefing @ 12. My Statement is ready. We’ll separate Fact from Fiction.”
INSIDE POLITICS
