The SA Revenue Service (Sars), which was one of the institutions weakened and hollowed out by state capture activities, has reorganised itself and is capable of once again taking on the corporates and high-net individuals whom it suspects of not paying the fiscus what is due to it.
Sars has been on a rebuilding project after erstwhile chief tax collector Tom Moyane brought the entity to its knees.
Business Day in 2024 led the coverage of Sars taking on alleged tax dodgers. The tax agency is suing multinational sportswear manufacturer Adidas over unpaid taxes amounting to R1.9bn, accusing the sportswear company of underpaying customs duties.
Business Day has learnt that the tax authority has taken on Switzerland-based Adidas International Trading and its SA unit for allegedly underpaying taxes for eight years, until 2013.
Adidas is disputing the tax liability with the matter set to be resolved by SA courts.
The tax agency in June took a major leap in its journey to implement the recommendation of the panel chaired by retired judge Robert Nugent, appointing three deputy commissioners, the first time in its history that the tax man has had three deputies.
Pepkor CEO Pieter Erasmus is engaged in a titanic battle with Sars, which is demanding more than R300m from him.
The tax authority says Erasmus, who returned as Pepkor’s CEO earlier in 2023 after five years, was party to an alleged “impermissible tax avoidance arrangement” in terms of the Income Tax Act.
The case involves an entity, Treemo, in which Erasmus and his family trust owned shares and which paid him R1.4bn in a capital distribution and a cash distribution in 2015.
— The agency has also not shied away from taking on politically connected entities and persons
Sars argued that the cash distributions from Treemo constituted dividend payments to Erasmus and his family trust, which were therefore subject to dividend tax.
Sars furnished him with an assessment of R183.5m in dividends tax, an understatement penalty of R137.6m, plus interest.
The agency has also not shied away from taking on politically connected entities and people. United Manganese of Kalahari (UMK), a company owned partly by US-sanctioned Russian mogul Viktor Vekselberg and the ANC’s funding front, Chancellor House, is also at loggerheads with Sars over a tax bill of more than R350m.
The company paid R30m into the ANC’s coffers in the past two years, including R15m towards its December elective national conference, according to declarations made to the Electoral Commission of SA (IEC) in line with the requirements of the Political Party Funding Act.
Sars has also circled controversial business person Roux Shabangu who lived a lavish lifestyle, spending about R1m a month on personal expenses, while he and his company Majestic Silver short-changed the fiscus of nearly R100m, according to a preservation order obtained by Sars.
Shabangu, according to the tax agency, owns no less than 15 vehicles, including a BMW X7 M5 and a BMW X6 M Competition.
Shabangu is well known for the furore that followed his landing of a R500m contract for the lease of an 18-storey office block in Pretoria’s CBD to the SA Police Service in 2010.
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