Betway Premiership club TS Galaxy is facing a devastating financial storm after the taxman hit the club with a staggering tax bill of more than R66 million.
Africa Daily can exclusively reveal that the South African Revenue Service (SARS) has obtained a default judgment against the Mpumalanga-based outfit over unpaid taxes and is planning to embark on a collection process that has the potentially to financially cripple the club.
Court papers seen by this publication reveal that the bulk of the debt stems from unpaid Pay As You Earn (PAYE), which amounts to R42.4 million. The amount ballooned to more than R60.3 million after SARS imposed over R4.3 million in penalties and a further R13.5 million in interest.
The taxman also stated that the club owes more than R1.2 million in unpaid Unemployment Insurance Fund (UIF) contributions. The amount later increased to over R1.7 million after penalties of more than R122 000 and interest exceeding R370 000 were added.
In addition, SARS stated that the club owes over R3.5 million in unpaid Value Added Tax (VAT). After imposing penalties of more than R300 000 and interest of just under R900 000, the amount skyrocketed to more than R4.7 million.
This brings the club’s total tax debt to more than R66 million.
Club owner Tim Sukazi confirmed that the club has indeed been battling a crippling tax bill, but said he was unaware that SARS had already applied for a default judgment against the team.
Sukazi told this publication that the club has been making monthly payments of R500 000 to SARS since becoming aware of the debt in July last year.
“So far we may have paid them over R9 million. We are negotiating with them to reach a compromise on the amount owed,” said Sukazi.
Before approaching the courts for a default judgment, SARS issued a final letter of demand to the club, warning of severe consequences should the debt remain unpaid.
“According to the records of the South African Revenue Service (SARS), you have failed to pay your tax debt for one or more tax year(s) and/or tax period(s).
Overdue Amount: R60 074 393.34/latest account statement balance,” reads the letter.
The letter further advised the club of several remedies available under the law, including payment in instalments, suspension of the debt should the club lodge a formal dispute, and the possibility of reaching a compromise with SARS.
SARS also warned that failure to settle the debt could result in third parties being instructed to pay money directly to SARS on behalf of the club.
“A civil judgment 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,” the letter further reads.