Shauwn Mkhize faces legal setbacks in tax dispute with SARS
The South African Revenue Service (SARS) has welcomed the North Gauteng High Court’s decision to strike Shauwn Mkhize’s urgent application seeking an order that its curator issues a letter assuring the National Soccer League (NSL) that her soccer club was financially sound to play its games.
The Royal AM FC has on several occasions, since the beginning of the soccer season, been unable to participate in the Betway Premiership and Nedbank Cup tournaments.
On January 29, it launched an urgent application at the North Gauteng High Court, Pretoria, against the curator, SARS, and the NSL by way of an urgent application, but the court had on February 5 struck the application from the roll for lack of urgency, with costs.
Commissioner Edward Kieswetter welcomed the court decision as a lesson that taxpayers should always meet their tax obligations.
“It boggles the mind that taxpayers will turn to courts with ease yet derelict in their responsibility to meet their obligations with similar enthusiasm.
“SARS is enjoined by the law to administer the law without fear or favour, and to ensure that all taxpayers who are expected to register, file, and pay their taxes do it with ease,” said Kieswetter in a statement released on Friday.
Both Mkhize and Royal AM general manager, Richard Makhoba, have not responded to the questions sent to them this week.
According to the statement, the club wanted the court to force the curator to issue a letter of comfort to the NSL, guaranteeing the club’s financial ability to fulfil its league fixtures.
“The application also sought to review the curator’s decision not to issue the letter of comfort as irrational, unreasonable, and unlawful.
“In the alternative, the club requested the court to compel the NSL to allow the club to play the remainder of the football season’s league and Nedbank Cup games,” read the statement.
Previously, the Durban, Pietermaritzburg, and Pretoria high courts ruled against the club and another of Mkhize’s entities, Shandi Trust, over Mkhize’s assets, including the club, which failed to pay the salaries of its players in December.
Shandi is alleged to be owing SARS about R37 million.
“This week, two judgments relating to these preservation orders were issued by the North Gauteng and KwaZulu-Natal Division, Pietermaritzburg high courts, both in SARS’s favour.”
The statement said the court was satisfied that the club had failed to meet the test for urgency “as set out in the court’s practice note”.
“The court stated that procedures and practice notes are not there for the taking; an applicant needs to set out facts showing why the matter is urgent.
“The urgency was self-created as the club was aware of its precarious position vis a vis the curator’s inability to provide a letter of comfort to the NSL, way before it elected to launch the urgent application.
“The court did not deal with the merits, and because of the court’s ruling, the club remains suspended from the NSL.”
The court rulings might add pressure on the Msunduzi Municipality to withdraw its three-year sponsorship of R27 million to the club, which was signed in 2023 to run until the end 2026.
The club has already received R9 million in the 2023/2024 financial year.
Msundizi awarded the sponsorship in exchange for the team to, in the three-year period, benefit the city by attracting soccer fans to fill up its Harry Gwala Stadium, therefore boosting tourism.
Municipality spokesperson, Ntobeko Ngcobo, said this week that the municipality had withheld the second R9 million for the 2024/2025 financial year, which was due to be released from July last year because the club had not yet fulfilled its contractual obligations, including submitting an annual financial report “to show how they used the money”.
The issue of the ratepayers’ money sponsoring the club would also be heard at the Pietermaritzburg High Court on February 28 following the DA’s application to have the contract cancelled.
DA councillor Ross Strachan said the court case would be a platform for the municipality to come out of the closet about the full nature of the contract, which was awarded apparently in breach of the law since Mkhize was already investigated for violating tax laws.
Strachan’s January 21 motion to get the council to debate the sponsorship was rejected on the basis that the matter was subject to court.
Strachan wanted the council to debate the curatorship, the cancellation of the team, which he said was no longer benefiting tourism in the city or ratepayers, and that the team’s brand was attracting negative publicity, which tarnished the city’s image.
“The legal department (of the city) is tasked with reviewing the sponsorship contract and evaluating ways of terminating it, and publicly distances itself from Royal AM,” read the DA’s motion.
“And I am happy that the matter is in court because at least we are going to hold people accountable and get the information and the facts.
“We are looking forward to winning the court case,” he said.
bongani.hans@inl.co.za