Zuma could be liable for tax on Nkandla upgrades

2013-12-24 00:00

PRESIDENT Jacob Zuma will have to pay fringe benefit tax on any personal benefit he derived from the R206 million upgrades at his Nkandla residence, a tax expert says.

Pretoria auditor Rudie van Zyl, who specialises in tax matters, told financial website Moneyweb that if the taxman came knocking, Zuma could face a multi-million-rand bill.

Public Works Minister Thulas Nxesi last week released the full report of a government task team into the Nkandla upgrades.

He insisted the president had not used state resources to build or upgrade his house.

But, as Moneyweb’s report highlighted, preliminary findings of Public Protector Thuli Madonsela, published earlier by the Mail & Guardian (M&G) from an alleged leaked report and other documents, claimed the president benefited by as much as R20 million.

The South African Revenue Service (SARS) spokesperson Adrian Lackay said SARS would take a view on it once the facts around the Nkandla spending had been finalised and published.

He was unavailable for further comment yesterday.

Van Zyl told Moneyweb that depending on what the benefit was to Zuma in the final calculation his tax liability could be between R8 million and R82,4 million.

Van Zyl said in terms of the Income Tax Act any benefit enjoyed by any other party on Zuma’s behalf, could also be regarded as a taxable benefit to him.

If it was found that the total R206 million was spent for his personal benefit, his tax liability would be R82,4 million, but that was unlikely as work had also been done on state land.

If it was R20 million as the M&G calculated, the tax liability could be R8 million.

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