Manase: The taxman cometh

2013-08-04 14:00

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The taxman is preparing to place companies identified in the explosive Manase report under the microscope.

The report, the contents of which City Press revealed last week, identifies a number of companies that allegedly failed to pay VAT on contracts with the eThekwini municipality.

The SA Revenue Service (Sars) has now confirmed it will follow up all instances of alleged tax evasion identified in the report.

The report was compiled by auditors Manase and Associates after they investigated some R2.5 billion in irregular expenditures by the municipality over a three-year period.

But Sars spokesperson Adrian Lackay said it would “take some time over the next few months to obtain results”.

According to the report, at least two contractors – Sihlesomusa Trading Enterprises and Vusi Mvelase and Associates – received payments of R5 959 600 and R4 030 698, respectively, for work on the city’s Westrich Housing Project, which was itself awarded irregularly.

As a result, the report found, they failed to pay R564 297 and R334 344, respectively, which was due to Sars in VAT. They also failed to register themselves as VAT vendors, which they should have done because they were receiving payments from the city totalling more than R1 million.

The report also recommended that the municipality discipline the officials who signed off on and made the payments without first having received valid VAT certificates from the contractors.

The city was also directed to tighten up its tax regime and to issue no further payments to contractors who did not provide VAT invoices and who did not provide tax clearance certificates.

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