The Democratic Alliance (DA) has published the amount which the party believes – ‘based on a thorough analysis of the law and supporting documentation’ – is due by Jacob Zuma, ‘as a result of taxable fringe benefits accrued to him through the Nkandla upgrades’.
According to the report Zuma owes a staggering 63.9 Million Rand to SARS – this is 25.98% of the total cost of upgrades to Nkandla.
DA report: How much does Zuma owe?
Legal precedent set by Income Tax Case 1346 44 SATC 31, established that even if, in a subsequent year, an employee repays an amount that was determined to be taxable income in a prior year it may not be offset against the taxable income of the year in which it is repaid nor may it be offset against the taxable income of the year in which the taxable amount was received.
Therefore, in President Zuma’s case, even if he repays the R 7.8-million as determined by the National Treasury, in line with the Constitutional Court’s ruling, this amount may not be used to reduce the value of the taxable fringe benefit received in a prior year.
Thus Zuma is liable for income tax on the full value of the improvements made to his Nkandla home.
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, which includes a 10% charge for late payment penalties as a result of his failure to declare and pay the tax on the taxable fringe benefits in the years that they accrued to him.
On studying and evaluating the full list of upgrades, we found that the total taxable Fringe Benefit amounted to R 145,185,235, which taxed at the applicable marginal rate of 40% would amount to R 58,074,094. When this is added to 10% penalty for late payment, of R 5,807,409, we arrive at the total payable figure of R 63,881,503
|Taxable Fringe Benefit||R 145,185,235|
|Taxation due at a rate of 40%||R 58,074,094|
|Penalty for late payment – 10%||R 5,807,409|
|Total of Tax and Penalty||R 63,881,503|
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.
President Zuma must at once pay the tax that is due, and pay it personally. South Africans cannot continue to suffer while Jacob Zuma has lined his pockets with public money destined for the advancement of our country.
In addition to this I call on Jacob Zuma to give SARS written consent to make public the information regarding his tax matters in relation to the Nkandla Project, specifically the information regarding the issue of fringe benefit taxes that he is liable for.