Taxation - are ANC members exempt as Malema claims?

President Jacob Zuma (Image: GCIS)

Employing, as Thabo Mbeki and Jacob Zuma are wont to do, the royal "we", Malema whined: "When we were inside the ANC, we did not get a tax bill. Now that we are outside, we get an abnormal tax bill."

And Zuma, for whom Malema famously vowed to commit murder, or, anyway, kill people, has himself been the target of the Revenue Service on the hunt for unpaid taxes on undeclared income. This might have included a "gift" of R1m from Nelson Mandela when Zuma was expelled by Mbeki from the office of deputy president in 2005.

To this day, no one knows what, if any, tax was paid by anyone on this transfer of funds. Either the donor or the recipient would have had to fork out 20% in donations tax, with each donor limited to a non-taxable amount of R100,000 a year.

Doubtlessly, Mandela acted out of compassion for an old struggle comrade, but everyone is subject to taxation.

Audit

An audit by the accounting firm KPMG revealed that Zuma received 783 separate payments, totalling at least R4m, from the recovering convict Schabir Shaik, who was found guilty by Judge Hilary Squires of having a corrupt relationship with Zuma.

Was tax paid by anyone on this movement of funds? We will never know because the Income Tax Act protects taxpayer information unless it ends up in court. Taxpayer confidentiality is also recognised in other countries, including the US, but this has not prevented President Barack Obama from revealing his past 10 years' tax returns.

Britain's Prime Minister David Cameron has said he is "very relaxed" about publishing his personal tax returns. The British public is evenly divided on the matter, with almost half saying that politicians are as entitled as anyone else to their privacy.

The Mail & Guardian, which obtained a copy of the KPMG report, said it showed that Zuma was incapable of managing his own finances, leaving a trail of terrible credit ratings, overdrawn bank accounts and unpaid credit card bills.

"Generally, the financial position of Zuma deteriorated over time," states the report, adding that his "lifestyle" and the demands of his "immediate family and other individuals" meant that "Zuma's cash requirements by far exceeded his ability to fund such requirements from his salary".

Discounts don't count

One trusts that all the help for a man whose tortuous financial and personal affairs rendered him virtually, if never legally, bankrupt was properly investigated by SARS and appropriate taxes levied on either or both the donors and the recipient of such favours.

In 2007 SARS did, in fact, serve Zuma with a summons for failing to submit his returns and was outraged when it was suggested that the tax authorities themselves had released the information. Zuma's lawyer, Michael Hulley, somehow sorted this out for him and was eventually rewarded with a powerful, probably quite lucrative, job on the public payroll.

Hulley is a "part-time" legal adviser to the president, whatever that entails. This means he can be paid by the hour. He is a specialist in criminal law, which is curious. Or perhaps not. He is also in possession of secret recordings said to be somewhat unkind to Zuma.

Meanwhile, there is good news for all of us, including our spend-thrift civil servants, in the fact that any frequent-flyer points and other goodies you earn using a credit card, as our minister of international relations, Maite Nkoana-Mashabane, may have done in needlessly renting a private jet for R235,000 in Oslo, remain tax-free. They are basically discounts and discounts are not taxable.

Source: Business Times via I-Net Bridge