ANC cannot pay salaries – and owes SARS millions

The cash-strapped ANC is struggling to pay salaries after the South African Revenue Service (SARS) laid claim to R17 million because of unpaid taxes.

This is according to a report in the Sunday Times, which said SARS has garnisheed R17 million allocated to the ANC by the IEC for the first quarter of 2021/22.

Luthuli House general manager Febe Potgieter informed employees of the situation on Friday.

“Due to continued financial difficulties, this situation of uncertainty with regard to the exact date of payment of salaries is likely to continue for the coming three to six months,” Potgieter wrote.

“We appeal to the financial institutions and other creditors of our staff to take note that late payments by no means are the fault of the individual staff, and therefore not to penalise them for this unfortunate situation.”

According to ANC insiders, the party had an R80 million tax bill when Paul Mashatile became treasurer-general in December 2017, while the party reportedly owed a further R140 million in provident-fund debt.

Insiders allege that the tax bill includes millions of rands in PAYE tax which was deducted from salaries, but not paid to SARS.

“When the current [treasurer-general] came into office there was an R80m debt that he inherited that was owed to Sars,” an ANC insider told the Sunday Times.

“To date he has paid over R100m servicing that debt and its interest. But because of the interest, the debt remains high to date.”

Luthuli House general manager Febe Potgieter
Luthuli House general manager Febe Potgieter

The news that the ANC has been unable to pay salaries will be a particularly bitter pill for staff to swallow following recent revelations of corruption involving the ruling party.

A forensic investigation found that Econ Oil and Energy secured deals to supply Eskom with fuel oil at inflated prices by paying inducements – including donations to the ANC.

Econ allegedly won the contracts with the help of Thandi Marah, who was the senior manager of business enablement at Eskom at the time.

Legal firm Bowmans, which Eskom commissioned to conduct the probe, alleged that Marah interfered in the tender processes.

The report alleges that Marah and Econ’s only director, Nothemba Mlonzi, pressured Eskom staff to disclose other fuel suppliers’ prices to Econ Oil ahead of the conclusion of tenders.

It also details a request Marah made to Mlonzi to make a payment to a women’s charity, and Mlonzi also reportedly paid for Marah and other Eskom staff to attend an ANC fund-raising dinner.

The price of a table at this dinner ranged from R150,000 to R700,000.

Mlonzi denied the allegations in a response to Eskom.

Cyril Ramaphosa South African President
President Cyril Ramaphosa

The failure to pay ANC salaries follows President Cyril Ramaphosa committing to taking a hard stance on corruption and criminality in the ANC earlier this year.

In his closing address to the ANC’s NEC meeting on 14 February, Ramaphosa said the Consitution and the rule of law are “sacrosanct” and must be respected.

“To allow anything else would lead to anarchy and open the floodgates easily for counter-revolution,” said Ramaphosa.

“Corruption and state capture, as well as lawlessness, are against the core principles and values of the ANC.”

He also noted that the NEC has adopted guidelines on dealing with those within its ranks found to have acted against the law, or of other serious misdemeanours.

These guidelines indicate that any ANC member facing criminal charges should step aside voluntarily.

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ANC cannot pay salaries – and owes SARS millions