It is alleged that during 2018 and 2019, a company called Batsha Ba Tirong Financial Management Pty (Ltd) t/a Batsha Ba Tirong Security Services submitted fraudulent IRP5 certificates to South African Revenue Service (SARS) claiming company income tax returns. The South African Revenue Service suffered a total loss of R21 million.

He is scheduled to appear before the Kimberley Magistrates’ Court on Thursday, 10 June 2021.

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It is alleged that over the period of 2011 and 2016 Morebudi failed to register pay as you earn (PAYE) and submission of EMP 201 returns as well as deduction of employees’ tax or to pay over to SARS. Subsequently the South African Revenue Services (SARS) was prejudiced and suffered a total loss exceeding R13.3 million.

A preliminary probe by SARS prompted a report to the Hawks’ Serious Commercial Crime Investigation in Bloemfontein during April 2018, which resulted in his arrest in the early hours of today and first appearance in court.

The case against Morebudi has been postponed to Wednesday, 11 August 2021 for legal representative. Morebudi is out on a R3000 bail.

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The group is scheduled to appear in the Cape Town Regional Court on 29 April 2021 on fraud charges after they allegedly submitted false and fraudulent tax returns to the South African Revenue Services (SARS) on behalf of their clients.
The director who is an Accountant, allegedly submitted fraudulent tax return claims for the period 2011 to 2018 which resulted in SARS losing more than R488 000.00.

Meanwhile, in a separate but related matter, a 50-year-old suspect is expected to appear at the Bellville Regional Court on 13 April 2021, after he was served with a summons to appear before the court by the same team. This also on charges relating to misrepresentations made to SARS on Value Added Tax (VAT) returns where the receiver of revenue suffered a loss of more than R10 million.

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The object of the contract (or the parties ‘rights and obligations under the contract) must be established.

The object of the contract is not a mere indicator, but determines the legal nature of the contract.

The object to be established is the pre-eminent object, for example, if the object is the surrender of productive capacity (whether capacity to provide a service or to produce things), then the contract is for employment of an employee.

The essence of an employee’s contract (contract of service) is the placing of one person’s services (labour) at the disposal of another, enabling the acquisition of that service itself and not simply the fruits of that productive capacity.

If the object is the acquisition of the result of deployed productive capacity (of a produced thing or of a provided service), then the contract is for the employment of an independent contractor. The essence of an independent contractor’s contract (contract for services or work) is that the independent contractor only commits himself/herself to deliver the product or end result of that capacity.

Deemed independent contractor

The person will be deemed to be an independent contractor if he/she throughout the year of assessment employs three or more employees (other than any employee who is a connected person in relation to such person) who are on a full-time basis engage in the business of persons rendering any such service and providing that neither of the above two proviso’s under exceptions are applicable

The employer, being a party to the employment contract, is in the best position to determine whether or not the employee is an independent contractor.

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Fails to:

• Deduct employees tax from remuneration or to pay tax to the Commissioner within the prescribed period;
• Deliver IRP5/IT3(a) to employees or former employees within the prescribed periods
• Apply for registration as an employer;
• Comply with a written request for information;
• Notify the Commissioner of a change of address; or that he/she has ceased to be an employer;
• Comply with the conditions for using a mechanised system for printing IRP5/IT3(a) to be issued to employees or former employees;
• Maintain a record of remuneration paid and tax deducted
• Comply with any condition prescribed by the Commissioner in regard to the manner in which IRP5/IT3(a) may be used, the surrender of unused stocks of certificates, accounting for used, unused and spoiled IRP5/IT3(a) when required by the Commissioner to do so or to surrender unused IRP5/IT3(a) when ceasing to be an employer;
• Comply with an Income Tax directive issued by Commissioner
• Uses/applies employees’ tax deducted or withheld, for purposes other than the payment of such amount to the Commissioner;
• Permits a false IRP5/IT3(a) to be issued or knowingly is in possession of or uses a false IRP5/IT3(a);
• Alters an IRP5/IT3(a) issued by any other person, purports to be employee named on any IRP5/IT3(a) or obtains a credit for his/her own advantage or benefit in respect of employees’
  tax deducted or withheld from another person’s remuneration;
• Not being an employer and without authority from an employer issues or causes to be issued, any document purporting to be an IRP5/IT3(a);
• Furnishes false information or misleads his/her employer regarding the amount of employees tax to be deducted in his/her/their case;
• Defaults in rendering a return.

An employer shall be guilty of an offence may be fined or sentenced to imprisonment for a period not exceeding 12 months.

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The following records of all employees’ needs are to be maintained by the employer, as may be prescribed by the Commissioner.

• Amount of remuneration paid;

• Employees’ tax deducted/withheld on all remuneration;

• UIF contributions;

• Income Tax reference number of that employee; and

• Such further information as the Commissioner may prescribe.

The records must be kept for a period of five (5) years from the date of the submission of the return and from the end of the relevant tax period if the person is not required to submit a tax return but has earned some form of taxable income. The employer must retain such records and make them available for scrutiny by the Commissioner.

Employers who supply the tax certificate information on an electronic medium or electronically, must also keep such records for the prescribed period.

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Where an employer is liable to pay the SDL levy, the employer must register as an employer with SARS and must indicate the jurisdiction of the SETA within which the employer must be classified.

Where an employer is liable to pay the UIF contribution, the employer must register with SARS or the UIF office (whichever is applicable to such employer) for the payment of the contributions.

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In addition thereto, the employer is obliged to submit an Employer Reconciliation Declaration (EMP501) to SARS.

In terms of Paragraph 3 of the Fourth Schedule, employees’ tax receives preference over any other deduction from the employee’s remuneration which the employer has a right or is obliged to deduct otherwise than in terms of any law.

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Tax Rates for 2015 is as follows:

Personal Tax

Income Tax

The amount an individual can earn before they are required to pay tax has been increased for the tax year that runs from 1 March 2015 to 29 February 2016.

Tax rebate increases

Sin Tax

Excise duties on alcoholic beverages will increase between 4.8% and 8.5%. There are some reforms under consideration that will provide excise duty relief to wine-based spirits.

The increases in excise duties are as follows:

Alcohol:

Tobacco

Fuel levy

This will increase fuel prices by 80.5c.

Medical Schemes

The monthly medical scheme contributions tax credits will increase from 1 March 2015. The first two beneficiaries will be increased from R257 to R270 per month and each additional beneficiary will be increased from R172 to R181 per month. Medical tax credits which are related to medical scheme contributions, will be taken into account for both PAYE and provisional tax purposes.

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