DA concerned with SAA’s lack of tax compliance

The Democratic Alliance (DA) will write to Minister of Finance Tito Mboweni after it was reported that the South African Airways (SAA) was not tax-compliant.

DA MP Ashor Sarupen said in a statement on Tuesday: “It has come to the attention of the DA that SAA is still not tax-compliant, despite this being a condition of tens of billions of rands taxpayer bailouts to the ailing state-owned company.”

Sarupen said the matter was revealed in a report tabled to parliament’s appropriations committee on Monday, 11 May.

He said last year, the National Treasury imposed conditions onto SAA in return for taxpayer support in an attempt to begin to institute financial controls over the airline which said: “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 (Sars) within the required time frames and not withheld for other purposes.”

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“However, it was revealed that SAA is not complying with this condition, and has been not been paying the PAYE personal income tax deductions from its employees over to Sars,” the MP said.

Sarupen said the report tabled to parliament revealed that: “The BRPs (business rescue practitioners) and SAA are currently negotiating to delay payments to Sars due to liquidity constraints. However, payments due to Sars will be made as soon as the liquidity position of the airline improves.”

The MP said the matter was troubling as employees of SAA were in a situation where they had their taxes deducted from their salaries, but for all intents and purposes were not tax-compliant, in addition to losing their jobs and incomes, as years of government mismanagement, cadre deployment and tender-related cost escalation had brought the airline to collapse.

“What is especially troubling is that the employees of SAA are now in a situation where they have had their taxes deducted from their salaries, but for all intents and purposes are not tax-compliant.

“As at January this year, it was estimated that R16.5 billion was paid over to SAA over the last ten years, with billions more loaned indirectly through government-backed loans from the private sector, as well as other government institutions such as the Development Bank of South Africa (DBSA), which loaned SAA R3.5 billion shortly before the business rescue practitioners considered liquidation in April 2020.

“The 2020/21 budget presently before parliament intends to appropriate a further R16.4 billion in financial support to the bankrupt airline,” he said.

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Sarupen said the DA would demand from Mboweni that no further taxpayer money will be handed over to SAA as a result of this non-compliance, and that money that has been transferred, but not yet spent, will be redirected to Sars to settle employee taxes.

“The DA will continue to monitor the situation at SAA closely in the real interests of all South Africans who are facing tough times while the ANC props up its select few at the expense of the many,” he said.

(Compiled by Molefe Seeletsa)

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