Owner claims VAT returns submitted and payments made

ONE of the Eastern Cape’s most established burial societies is embroiled in a legal dispute with the South African Revenue Services.

SARS has claimed more than R5million in VAT from Chitibunga Prepaid Funeral Services.

Chitibunga, which disputes the claim, has applied to the courts to adjudicate.

After several failed attempts at resolving the matter with SARS, Mqokeleli Herdboy Kepe, co-owner of Chitibunga, lodged a civil application earlier this month with the Transkei Division of the High Court.

In his court papers, Kepe said SARS’ claim of R5263874 – of which R3652018 is additional tax, penalties and interest – will not only affect the needs and rights of his business, but also those of thousands of “poor, rural black” people in the country.

Kepe wants the court to rescind the judgment taken against his company in April ordering them to pay the outstanding R5m.

He claims it will be in the best interest of his approximately 100000 policyholders that the courts adjudicate Chitibunga’s liability for the payment of VAT, if any.

He claims SARS erroneously registered Chitibunga Prepaid for VAT and calculated faulty VAT amounts.

He further pointed out in his court papers how, due to the high success and rapid expansion of Chitibunga Prepaid, the business encountered several problems with fraud, corruption and stealing.

He said each month millions of rands in cash passed through the hands of his clerks and that further “problems” experienced included theft of these monies by the clerks.

A subsequent forensic investigation, at a cost of R68400, found several irregularities including its drivers using business vehicles as transport services for their own benefit and that they serviced their own, friends and families’ vehicles and claimed the costs as expenses incurred by Chitibunga.

It also found that the company had failed to pay VAT due to the inefficiencies of at least two financial managers.

Kepe is adamant that VAT returns were submitted and the necessary payments were made.

SARS has not yet filed a reply to Kepe’s claims, but its spokesperson, Adrian Lackay, said they had filed a notice of intention to “vigorously” oppose it.

“The previous judgment was correct as SARS followed all due processes,” he said.

No court date has yet been set.
source:www.dispatch.co.za