The Democratic Alliance says that South African Airways is in breach of its bailout conditions. File photo
The Democratic Alliance says that South African Airways is in breach of its bailout conditions. File photo

SAA fails to pay tax deducted from staff salaries to SA Revenue Service

By ANA Reporter Time of article published May 12, 2020

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CAPE TOWN - South African Airways has not paid over the income tax the company deducted from its employees to the South African Revenue Service (Sars) and is therefore in breach of the bailout conditions imposed on it by the National Treasury, the DA said on Tuesday.

The stricken airline's failure to pay over the taxes emerged in a report to Parliament's committee on appropriations.

The DA's spokesperson on appropriations, Ashor Sarupen, said withholding staff PAYE deductions flouted a clear condition imposed on the airline last year in return for continued public funding.

Sarupen quoted the following from the National Treasury directives: “SAA must be tax compliant by ensuring that where taxes have been deducted from employees that these deductions be paid over to the South African Revenue Service within the required time frames and not withheld for other purposes.”

He said the report to the appropriations committee made clear that the airline's business rescue practitioners (BRPs) were withholding staff's deductions to weather SAA's liquidity crisis.

“The BRPs and SAA are currently negotiating to delay payments to the South African Revenue Service due to liquidity constraints. However, payments due to SARS will be made as soon as the liquidity position of the airline improves.”

Sarupen said this means that employees of SAA are now in a position where their taxes have been deducted from their salaries but they cannot be considered tax compliant, on top of which they are likely to lose their jobs and income.

The government has turned down a request from the business rescue team at SAA for further funding to the tune of R10 billion, and Public Enterprises Minister Pravin Gordhan has questioned whether the manner in which the last cash injection into the company of R5.5bn returned "value for money" to the government as shareholder.

- African News Agency (ANA) 

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