Zuma must pay R63.9 million in tax for Nkandla: DA

 ·7 Jul 2016

The Democratic Alliance says that, by its own calculations, president Jacob Zuma owes R63.9 million in taxes for fringe benefits on the upgrades to Nkandla.

This is on top of the R7.8 million that the president was ordered to pay back for the Nkandla upgrades, as ordered by the Constitutional Court earlier in the year.

At a press briefing on Thursday, the DA said that in terms of the Seventh Schedule of the Income Tax Act – Act 58 of 1962 – Zuma owes money to SARS (and by extension, the people of South Africa) for the benefits he derived from the upgrade to Nkandla.

The Act defines a fringe benefit as:

Taxable benefit means a taxable benefit contemplated in paragraph 2, whether the grant of such benefit is voluntary or otherwise.

“The emphasis here is on ‘voluntary or otherwise’, because if we recall, Zuma once firmly stated that ‘They did this without telling me – why should I pay for something I did not ask for?’,” DA leader, Mmusi Maimane said.

“This was later proved to be false, since Zuma had personally discussed the details of the upgrade with his architect, had instructed that his personal architect take the lead on the project, and had received correspondence relating to Nkandla.”

“It is our strong opinion, based on a thorough analysis of the law and supporting documentation that Zuma’s tax liability as a result of taxable fringe benefits accrued to him through the Nkandla upgrades amounts to R 63.9 million,” the DA leader said.

How the tax was calculated

The party said that Zuma’s taxable fringe benefit for upgrades to his Nkandla home amounted to R145.2 million rand – this equates to a tax of R58 million (at a rate of 40%), and a 10% late payment penalty of R5.8 million.

 Tax Amount
Taxable Fringe Benefit R145 185 235
Taxation due at a rate of 40% R58 074 094
Penalty for late payment – 10% R5 807 409
Total of tax and penalty R63 881 503

“But that’s not the end of it. In addition to this amount there would be interest payable from the date that the tax became due and payable.” Maimane said.

The party said it would be writing to the SARS Commissioner in order to determine whether SARS has conducted a forensic audit to determine the tax liability of President Zuma.

Maimane said that SARS must investigate this issue as a matter of urgency.

“I wish to reiterate that this has nothing to do with the R7.8 million which the Constitutional Court found Jacob Zuma owed for the non-security upgrades at Nkandla,” he said.

“This is about how much tax he owes for the upgrades at Nkandla, for which is personally liable. This war against corruption is far from over.”

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