The taxman continues to follow Muvhango executive producer Duma Ndlovu like a bad miasma for allegedly failing to settle a multimillion-rand value-added tax (VAT) bill.
Sunday World can exclusively reveal that the South African Revenue Service (Sars) applied for a default judgment against Ndlovu’s production entity, Rhythm World Production, at the Johannesburg High Court last week.
This after Ndlovu’s outfit failed to pay Sars over R11 million in VAT to the taxman.
The application for the default judgement comes hardly a year after Ndlovu was arrested for allegedly failing to declare his personal income, among other transgressions, resulting in Sars losing R25-million.
According to the application for the default judgment, which we have seen, Ndlovu’s Rhythm World owed Sars just under R10-million.
But the quantum spiked to more than R11.1-million after the receiver of revenue imposed R140 000 more in penalties and more than R1-million in interest.
Before applying the default judgement, Sars transmitted two letters to Ndlovu’s entity in two successive months this year, pleading with him to settle the astronomical bill.
Sars sent the first letter on April 22, reminding the company to pay over R10.9-million. This was followed by another on May 7, demanding over R15-million.
It appears Duma’s company paid a portion of the bill before Sars dragged him to court to have the company blacklisted, a move that will make it difficult, if not impossible, for it to trade in the private and public sectors.
In both letters, Sars advised the entity to pay the whopping debt or enter into a payment plan to settle the debt.
The taxman threatened to auction off the company’s assets if it failed to remit payment.
“According to the records of the South African Revenue Service, you have failed to pay your tax debt for one or more tax years and tax periods.
“You are requested to make full payment within 10 days from the date of this letter of
demand,” read the letter.
In the letter, Sars advised the company to apply within 10 business days from the date of issuance to arrange to pay the debt in instalments if it was unable to pay the full amount.
Ndlovu’s outfit was also advised to apply for suspension of the debt if he intended to submit or had submitted a formal dispute or compromise of a portion of the tax, where this would provide a higher return to the fund than liquidation, sequestration, or other collection measures.
Sars informed the production house that if it did not comply with its demands, it would go to court to seek an order to attach and auction off its assets.
“Failure to make full payment or use the above remedies may result in the following actions and possibly others: Sars may appoint any third party who presently or in the future will owe you money or hold money for you to settle your tax debt with this money.
“A civil judgment is being entered against you, in which case a warrant of execution may be issued for the sheriff of the court to attach and sell your assets.
“If you are a natural person, you may apply for a reduction of the amount to be paid to Sars based on you and your dependants’ basic living expenses.
“If you are a non-natural person, you may apply for a reduction of the amount to be paid to SARS based on serious financial hardship,” the application read.
This will be Ndlovu’s second public war with Sars.
The Muvhango founder is facing criminal prosecution for tax evasion amounting to R25-million.
He was arrested together with tax practitioners Rodney Mutsharini and Maxwell Mloyi and appeared in the Palm Ridge Specialised Commercial Crime Court in October last year.
His lawyers made a representation to the NPA to drop charges against him, saying he has done nothing wrong.
