Pretoria - EFF leader Julius Malema is again in trouble with the South African Revenue Service. The revenue collection service is gunning for him and the possibility of being sequestrated looms large for him.
This time, Sars wants about R20 million from Malema - R18m it claims is for arrears on his taxes, plus a further R2m in interest. This is for the 2005 to 2011 tax years.
The taxman last year cancelled an agreement it entered into with Malema pertaining to the terms and conditions under which he was to pay off his debt.
Sars revoked the agreement, claiming Malema had failed to come to the table, “by not complying with the conditions of the agreement”.
But the firebrand politician turned to the high court in Pretoria on Monday, asking for an order that the agreement he entered into with Sars in May 2014, was binding.
Malema argued he had settled his full debt and “does not owe a cent” to the taxman.
His advocate, Piet Louw SC, asked Judge Mabel Jansen to order that “Malema had fully adhered to the terms of the agreement and declare that he had settled all his compromised debt”.
Louw said Malema paid off all his debt with the help of donors and that his slate was clean.
However, Sars said it was not bound by the agreement and claimed, among others, that Malema had not been frank with the taxman regarding all his assets.
It said Malema did not declare a Polokwane property he took possession of in 2009.
But Malema countered that the deal never went through and he never actually bought the property - a vacant piece of land.
He said he told Sars about this failed deal back in 2012.
Advocate Jeremy Gauntlett SC, acting for Sars, said that in 2014, Malema paid the municipality in Polokwane R70 000 in arrears towards rates and taxes for the property.
Louw said Malema was due to fight a general election at the time, and simply paid the amount to get the debt collectors off his back.
Malema agreed to pay the money for the property, Louw said, with the view to later fighting the bill. “He always disputed the bill and said he would later take this up.”
Sars also claimed that Malema owed outstanding taxes for the year 2011/12.
It further disputed funds which Malema declared to be donations (which are not taxable).
Gauntlett said Malema failed to disclose a number of material facts to Sars and it was thus entitled to cancel the agreement.
One of the conditions was that Malema had to get his tax affairs in order, which he did not, Gauntlett said. “He was given a second chance, a clean slate (by Sars).”
Gauntlett said that as Malema did not adhere to all the conditions of the agreement, it meant that “the game was over”.
Sars was in the business of collecting funds for the public fiscus. “It does not sell cheese burgers,” Gauntlett said.
It was also important for Sars to know where the money Malema used to pay part of his tax debt with came from “as Sars wants the money to be above board”.
Malema insisted he had settled all his tax debt and questioned how Sars could unilaterally withdraw the agreement, keep the money he had paid and hold him liable for the original assessments.
The tax battle between Sars and Malema had in the past few years made several turns in court.
In 2012, Sars obtained a judgment confirming an outstanding tax debt of R16m. A provisional sequestration order against Malema for outstanding taxes was obtained in February 2014. In a sudden turn of events last June, Sars, did not go ahead with an application to obtain a final sequestration order. But Sars vowed to recover all its tax debt.
Malema, dressed in a red leather jacket, cut a lone figure in court, without any of his supporters.
Stony-faced, he ignored the media and mostly consulted with his lawyers. Sars refused to make the court papers available to the media, saying it “cannot be seen to run a parallel process with the court”.
Judgment was reserved.