Two Eastern Cape municipalities are among 39 in SA that are at risk of having their grant funding withheld by the National Treasury for failing to make Sars, pension and medical aid contribution payments.
The Dr Beyers Naudé Municipality failed to pay R15m owed to Sars and a further R8.9m to the pension fund.
The Makana municipality owes Sars R3.7m.
Finance minister Enoch Godongwana has written to co-operative governance and traditional affairs minister Velenkosi Hlabisa, notifying him of his department’s intention to invoke Section 216(2) of the constitution against the affected municipalities.
The section empowers the Treasury to enforce compliance by withholding funds from any organ of state that commits a serious or persistent material breach.
“There is a persistent failure by the 39 municipalities to pay water boards and/or third parties like pension funds, medical aids, Sars and the auditor-general SA and/or to adopt funded budgets,” Godongwana wrote.
“If a municipality fails to provide proof that it has fully paid the outstanding amounts owed to the respective water boards, Sars, pension or medical aid, the equitable share of that municipality will be stopped and will only be released in portions with conditions.
“All 39 municipalities will be required to provide evidence that Sars, pension and other staff benefits deducted from salaries of municipal officials have been paid over to the appropriate institution.”
Godongwana said if the municipalities failed to submit proof of payment, the Treasury would approach parliament to endorse the suspension of grant funding transfers.
Dr Beyers Naudé municipal spokesperson Edwardine Abader responded by sharing a letter that municipal manager Edward Rankwana had sent to the Treasury.
In the letter, Rankwana said that the municipality has an existing repayment plan with Sars, which was reviewed every four months.
“The municipality’s Sars tax status is disclosed as being compliant and may be verified using any of the channels available to Treasury.
“To provide further comfort, the municipality has provided all proof of payments indicating compliance with the arrangements and proof of payments have been uploaded monthly to the National Treasury Gomuni Upload portal.”
Makana municipal spokesperson Anele Mjekula said they were unaware of any outstanding debt to Sars as the municipality had consistently paid its contributions and provided proof of payment to both Sars and the Treasury.
“On July 4, the municipality was refunded R2.7m by Sars, which was the latest refund.
“Despite what Sars indicates to the National Treasury, the municipality is engaging Sars on the matter.
“PAYE is paid monthly, and the municipality has scheduled a meeting with Sars to understand the assessments they have made that led to the debt.”
Meanwhile, DA MPL Retief Odendaal said the cash shortfall threatened the provision of water, sanitation and electricity in Graaff-Reinet, Aberdeen, Willowmore, as well as Makhanda, Alicedale and surrounding rural settlements.
“Communities cannot be expected to suffer because funds that belong to Sars and municipal workers have been misused,” he said.
The Herald
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