SAA still not paying employee taxes over to SARS
12 May 2020
It has come to the attention of the Democratic Alliance (DA) that South African Airways (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. This was revealed in a report tabled to Parliament’s Appropriations Committee on the 11th of May 2020.
Last year, in an attempt to begin to institute financial controls over SAA, National Treasury imposed the following condition onto SAA in return for taxpayer support:
“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.”
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 report tabled to parliament stated:
“The BRPs (business rescue practitioners) and SAA are currently negotiating to delay payments to South African Revenue Services (SARS) due to liquidity constraints. However, payments due to SARS will be made as soon as the liquidity position of the airline improves.”
This is especially troubling as 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, in addition to losing their jobs and incomes, as years of government mismanagement, cadre deployment and tender-related cost escalation has brought the airline to collapse.
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.
The DA will be writing to the Finance Minister, Tito Mboweni, to demand that no further taxpayer moneys are handed over to SAA as a result of this non-compliance, and that moneys that have been transferred but not yet spent 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.
Issued by Ashor Sarupen, DA Member on the Appropriations Committee, 12 May 2020
