ANC staff left unpaid as ‘Sars nabs poll funds’
● The South African Revenue Service (Sars) is said to have garnisheed the ANC’s Independent Electoral Commission (IEC) allocation funds — taking away R17m meant for the governing party — in partpayment of the party’s ballooning tax bill.
This has resulted in the ANC again failing to pay its employees their salaries on time this month.
Luthuli House general manager Febe Potgieter told staff on Friday about the late salary payments.
“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 in a note.
“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.”
Party insiders told the Sunday Times that the ANC owed Sars millions, going back to when Jacob Zuma was its president and Zweli Mkhize the ANC treasurergeneral.
The IEC allocates R168m a year to all political parties in parliament. The money is distributed quarterly; R17m was the ANC’s share for the first quarter.
Sources at Luthuli House said that when Paul Mashatile became treasurergeneral in December 2017, the party faced an R80m tax bill.
The Sunday Times understands that the party failed to settle millions of rands in PAYE (pay as you earn) tax owed to Sars. The money, according to insiders, was deducted from ANC employees’ wages but not paid to Sars.
Sars national commissioner Edward Kieswetter declined to comment. “I won’t discuss taxpayers’ matters with anyone. I am not going to share taxpayer information with you,” he said.
IEC CEO Sy Mamabolo also refused to comment.
ANC sources with close knowledge of the party’s finances told the Sunday Times that the current leadership elected at the party’s conference in 2017 had found the party’s finances in a dire state.
Insiders said Mashatile discovered a Sars debt of about R80m as well as about R140m in provident-fund debt.
“When the current [treasurer-general]
came into office there was an R80m debt that he inherited that was owed to Sars,” said an ANC insider who has close knowledge of the party’s finances.
“To date he has paid over R100m servicing that debt and its interest. But because of the interest [accumulated], the debt remains high to date.”
The insider told the Sunday Times that the party had to continually negotiate with the revenue service to give it a portion of its IEC funding.
“What is happening now is that Sars takes money directly from the IEC,” said the insider, who asked to remain anonymous.
“They [IEC] have told Sars that our allocation of the funding must be paid to them because we owe them a lot of money.
“So we’ve always negotiated that they at least take 50% so that we’re able to pay salaries.”
An insider said Sars had garnisheed the ANC account and this had resulted in the party struggling to pay salaries.
“They garnisheed the ANC account at Sars. We’ve been struggling to pay salaries because [Sars] takes a lot.
“On most times we rely on donations to pay salaries because the party funding doesn’t come every month,” the insider said.
He said that the party’s financial department had decided that with the little IEC funding it got back from Sars and its funders, it would rather pay salaries and instead owe the money to Sars.
“What has happened is that when you pay salaries you must deduct PAYE that must go to the taxman, but because at times you can’t always raise money, the first thing you want to do is to pay salaries, and then you [would rather] owe Sars. So the ANC owes Sars for PAYE,” the insider said.
Attempts to reach Mashatile were unsuccessful.
Mkhize did not respond to questions sent to him.
However, one of the party’s previous treasurer-generals, Mathews Phosa, sought to distance himself from the financial mess of the party. He said that when he had left, the account was in good standing.
“If true, this is new to me, I never experienced this,” Phosa said.