Former Prasa head Lucky Montana testifies at the Zondo Commission in May 2021 in Johannesburg.
Luba Lesolle/Gallo Images via Getty Images
SARS disclosed former Prasa CEO Lucky Montana’s R55 million tax debt.It also revealed his failure to comply with audits as well as repeated extensions since 2020. Montana offered R5.4 million as a compromise,while simultaneously accusing SARS of fraud.Lucky Montana owes the SA Revenue Service (SARS) R55 133 282.94 and has submitted a compromise offer of R5.4 million to settle his tax debt.
This was revealed at a media briefing on Saturday when the tax-collecting authority made good on its promise to disclose the former Passenger Rail Agency of SA (Prasa) CEO’s normally confidential tax information,to counter the fraud claims he made against SARS.
According to SARS national spokesperson,Siphithi Sibeko,it was “untenable for Mr Montana to publicly attack SARS and its officials,whilst simultaneously seeking a compromise of a tax debt he accepts”.
This week,Montana charged that he had opened a fraud case against SARS commissioner Edward Kieswetter.
ADVERTISEMENT
According to him,Kieswetter and SARS officials had doctored a fake court judgment on which a SARS sequestration application was based.
READ | SARS to Lucky Montana: Withdraw your claims or we’ll publish your tax info
On Saturday,SARS provided what it considered all the information necessary to disprove Montana’s allegations against it.
This was in accordance with the Tax Administration Act,which empowers SARS to publicly disclose taxpayer information,“where it is necessary to counteract false statements that may undermine the integrity and public confidence in the tax system”.
ADVERTISEMENT
SARS had first given Montana 24 hours to withdraw his comments,or it said it would be compelled to release his taxpayer information to disprove his claims.
READ | SARS warns influencers to declare all income – including gifts and travel
On Saturday,three days later,it said it had no choice but to disclose the information.
Sibeko insisted that SARS was apolitical,charging that Montana’s claim that this was a “political witch-hunt” was baseless. Furthermore,he pointed out that the matter dates back to 2011,before Montana became a political representative.
According to its timeline of events,SARS notified Montana in November 2020 that it had initiated an audit of his tax returns from 2009 to 2019 after he failed to submit his income tax returns for the 2017,2018 and 2019 assessments.
He was requested to provide information for the audit by 4 December 2020,but Montana asked for and was granted an extension to 1 February 2021.
SARS,a day later,issued a final demand after Montana failed to submit the information. He still failed to comply.
The audit concluded in July that year,and SARS found that Montana had unlawfully evaded his taxes by under-declaring taxable income received from various sources over the 10-year audit period.
Montana received a Letter of Findings informing him that SARS intended to raise additional income tax assessments of R15.5 million. He was given 21 business days to respond.
Montana requested an extension until 16 August 2021 to respond. He did,but according to SARS failed to deal with the bulk and essence of the audit findings.
Sibeko said:
Instead of using the opportunity,Montana elected to attack SARS by making unsubstantiated and unfounded allegations against SARS,accusing it of ‘vindicative action’ and conducting a ‘witch hunt’
SARS denied the allegations and proceeded with the assessments with consideration of his submissions.
SARS issued a Finalisation of Audit letter to Montana advising him that SARS had raised the assessments in April 2022.
ADVERTISEMENT
According to Sibeko,Montana was informed in absolute detail of the basis of the assessments.
Montana was assessed for tax of R28 million,comprising capital and penalties,for the under-declared income. He was given until 26 May 2022 to object to the additional assessments formally.
Montana requested and was granted an extension to lodge his objection,but SARS received a “partial objection”,which “made unsubstantiated and unfounded allegations against SARS”.
According to Sibeko,Montana appointed new auditors/tax representatives and requested a further extension to lodge an objection to 1 July 2022,which was granted.
When another 30-day extension was requested,this was declined and Montana was issued a final demand to pay on 11 July 2022.
When he did not comply,SARS commenced with recovery steps.
In September 2022,Montana submitted a letter to SARS to overturn his objection to the audit raised in his letter,dated 31 May 2022,saying that he reserved his right to respond to the default judgment obtained by SARS “once we have had time to peruse and evaluate the judgment”.
According to Sibeko,this still did not comply with the requirements for an objection under the Tax Administration Act.
Later that same month,Montana sent another letter to SARS to respond to the default judgment against him for R44 million.
He said he was not home then and was not served with a summons.
Sibeko said:
The fact that Montana has,after all this time,still not applied to the High Court for the tax judgment to be rescinded is significant. It is by now no longer open for him to do so.
SARS’s attorneys,in November that year,issued a letter informing Montana that his purported objection was invalid and was thus not accepted. Montana was given until 31 January 2023 to submit a valid objection.
Montana,in December 2022,informed SARS that he did not intend to file any proper objection.
READ | ‘Most wanted’ woman caught in North West,charged with defrauding SARS of R1.5m
ADVERTISEMENT
“According to him,he considered his 20 September 2022 submission sufficient,” Sibeko said.
SARS informed Montana in January 2023 that no more late objections would be granted.
Sibeko said Montana had still not filed a valid objection.
“In terms of…the Tax Administration Act,the additional assessments have therefore become final and are no longer open to dispute.
“Montana’s contention that he only recently became aware of the full extent of his tax liability is therefore false and dishonest,” he said.
Montana this week alleged to online news agency Independent Online that SARS had “abused it powers”,“fraudulently doctored a fake court judgment to justify a hefty tax bill “,and was conducting a “politically motivated witch hunt” against him.
He claimed to have laid charges against Kieswetter and SARS officials in response.
But,according to SARS,Montana in August submitted a compromise offer for R5.4 million to satisfy the R55 million tax debt.
“A prerequisite in terms of the Tax Administration Act for SARS to consider a compromise offer,is that the tax debt may not be disputed. In other words,the taxpayer must accept that the tax is due and payable,” Sibeko pointed out.
Sibeko told News24 the sequestration order against Montana would proceed.
“He’s made an offer [of R5.4 million] which we will consider and take a decision based on that,” he said.
United News - unews.co.za