Former Passenger Rail Agency of SA (Prasa) CEO Lucky Montana failed to declare R36m income over 10 years to the SA Revenue Service (Sars) and more than R2m in capital gains, records from the revenue authority show.
Montana, now an MP for the MK Party and a key ally of former president Jacob Zuma, is stuck in a legal battle to pay the tax debt, which has ballooned to R55m with interest and penalties.
Sars wants the Pretoria high court to appoint a trustee to undertake the sequestration of Montana’s estate and the possession of his assets to recover the outstanding tax debt.
It also requested that Montana be declared insolvent because his assets are worth only R10.5m. An insolvency declaration would threaten Montana’s job as an MP and could also affect his future role in business.
Audit covers decade
The dispute in question spanned the years 2009 to 2019. Sars at the weekend published Montana’s tax information after he had opened a criminal case against the tax authority accusing it of misleading the Pretoria high court.
Lucky Montana's Tax Debt
- R36m Income undeclared to Sars over 10 years
- R2m+ Undeclared capital gains
- R55m Current total debt including interest and penalties
- R44m Debt in 2022
- R10.5m Value of Montana’s assets
- R17.6m Income allegedly undeclared in 2016 alone
- R8.87m Undeclared income during Prasa CEO tenure (2010–2015)
- R2.85m Undeclared in 2013
- R2.89m Undeclared in 2014
- R2.6m Property deposits paid by law firm AJ Kempen Incorporated
- R5.4m Montana’s compromise offer to Sars
The tax authority’s documents showed Montana did not declare R17.6m in income in 2016— the largest amount he is said to have received in a year over the period of the audit.
Sars pinned Montana’s debt to millions of rand spent on cars and houses. These included money paid by a company, Precise Trade and Invest, owned by lawyer Riaan van der Walt. The lawyer paid millions in the purchase of properties owned by Montana. The property payments by Precise were also flagged in the Zondo commission on state capture report.
AJ Kempen Inc, a law firm based in Pretoria, paid R2.6m in deposits for properties bought by Montana. This was also recorded as undeclared funds by Montana.
Undeclared CEO earnings
During his tenure as the CEO of Prasa between 2010 and 2015, he received R8.87m in undeclared income, including R2.85m in 2013 and R2.89m in 2014. The Sars audit showed Montana had R13m in non-salary cash deposits.
In July, Montana suffered a blow in the court case when the high court dismissed his condonation application for late filing of the answering affidavit. He failed to file an answering affidavit for more than a year. The hearing will proceed without an affidavit defending Montana and leaves his fate entirely to the court to decide.
Compromise offer rejected
After the judgment, Sars spokesperson Siphithi Sibeko said Montana submitted a compromise offer to Sars, offering to pay R5.4m instead of R55m. A prerequisite in terms of the Tax Administration Act for Sars to consider a compromise offer was that the tax debt may not be disputed.
Montana, however, had disputed the debt, Sibeko said.
In a press briefing on Monday, Montana said he did not owe Sars a cent because he disputed the methodologies used in the audit report.
“I am at peace with myself, and I know that I do not owe Sars a cent. There is no doubt that Sars is a powerful institution and a formidable opponent,” he said.
“This is not about me but the citizens of SA who have lost their houses and vehicles and other assets they worked hard for and these are taken away from them by Sars with a stroke of pen.”
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