A legal battle has broken out between DJ Maphorisa and the South African Revenue Service (Sars) over a R3.3-million tax bill, which the award-winning musician is disputing.
Sunday World can exclusively reveal that Maphorisa, born Themba Sunnyboy Sekowe, has dragged Sars to the South African Tax Court at Megawatt Park, Johannesburg to appeal against the bill after the two -parties failed to reach a settlement of their -imbroglio.
According to the court papers, which Sunday World has seen, Sars informed Maphorisa on July 13, 2018, that it intended to conduct an income tax audit of his books because he had not submitted his tax returns.
It asked him to provide it with his IRP5/IT3 certificates, investment income certificate and bank statements.
The papers stated Maphorisa explained at the pre-trial conference that the tax returns were submitted on time after the audit commenced.
The papers also state that Maphorisa further alleged that he provided reasons why the returns were not submitted timeously, ostensibly, due to his mental ill-health
After the assessment, the taxman questioned whether the funds, which were paid into his FNB account, were part of his gross income.
Maphorisa disputed the assessment and contended that he had provided the receiver of revenue with his Standard Bank account details, bank statements and invoices relevant for the determination of his gross income.
Using the information extracted from Maphorisa’s FNB bank statements, Sars issued an audit finding in respect of the tax years on November 14, 2018.
Sars concluded after its assessment that Maphorisa intentionally evaded tax and imposed 200% penalties on his debts.
“The respondent has proven the facts relied upon to impose the USP (underestimated penalties) at the rate of 200% on the basis that the appellant’s conduct is correctly classified as intentional tax evasion,” read the papers.
“Due to the appellant’s failure to respond to the audit findings, the respondent used and applied the information that was readily available to issue the letter of finalisation of audit on 20 December 2018”, read the papers.
Sars said it raised estimated assessments, which in total amount to more than R3.3-million.
Afterwards, Maphorisa lodged his objections on May 23, 2022, in respect of the 2017 tax year and on July 11, 2022, regarding the 2015 to 2016 tax years.
He then informed Sars of his intention to object to the assessment, but Sars disallowed the objections on July 1, 2022, and on September 1, 2022,
respectively.
Maphorisa lodged his notice of appeal on September 6, 2022, in response to the disallowance of the objections.
He disputed that Sars requested him to provide it with the requisite documents, charged that the assessments were not properly raised, and that the tax liability as per the assessments was incorrect.
“The appellant asserts that Sars failed to take the requisite deductions (expense items) into account when assessing the appellant.
“The appellant asserts that imposition of the USP by Sars has not been reasonable.
“The appellant asserts that he has provided sufficient evidence that the amount in dispute does not form part of his gross income but amounts to inter-account transfers and should not be taxed,” read the papers.
“The parties agree that settlement negotiations were entered into but were, however, unsuccessful,” read the papers.
Attempts to solicit comments from Maphorisa drew a blank as he ignored our phone calls and text messages.
