The Pretoria high court has confirmed a Section 163 preservation order granted to the South African Revenue Service (Sars) in September 2020 against Johannesburg businessman Thabiso Hamilton Ndlovu and others.
Acting judge president of the Gauteng division Roland Sutherland on Monday said Ndlovu had no defence for his outstanding Sars bill and his reasons for challenging the provisional order were deficient.
According to Sutherland, Ndlovu caught Sars’ eye following his “spendthrift behaviour” when he bought five luxury cars in one go.
He bought one Lamborghini Urus, three Porsches and a Jeep for himself, the “kids”, his parents and his wife.
The collective value of the cars is said to be about R10.5 m.
“The spendthrift behaviour of Ndlovu; that five luxury cars acquired, at virtually one go, is evidence of consumption on a grand scale and gives rise to the inference that the assets under his control are unlikely to be deployed to the fiscus and are more likely to be devoted to immediate and extravagant gratification of material wants, depleting what is available to pay tax liabilities, present and future,” Sutherland said.
Sars officials on social media
The judge said Ndlovu was “solely responsible” for Sars taking an interest in his affairs by sharing his fleet on social media for the world to see.
At the time, he probably thought the backlash he received for flaunting his wealth during the pandemic was all he would get, but, according to Sutherland’s judgment, Sars officials are on social media too.
“He thrust himself out of obscurity by doing two things. First, in May 2020, he bought five luxury vehicles at the about the same time as certain of the other respondents received payment for lucrative contracts with the National Health Laboratory Service (NHLS).
“Then he bragged about this feat on social media. Apparently, there are people at SARS who trouble to follow social media. They looked at his tax affairs and were impressed that Ndlovu had spared Sars the burden of reading any tax returns since 2016.
“They referred the big spender to the Illicit Economy Unit who have a keen interest in mismatched income and expenditure phenomena. They delved into Ndlovu’s affairs, including his banking accounts.
“What was observed were flows of money to and from one or other of the respondents and to elsewhere and other incongruent cashflows into one or other respondent which did not ostensibly have a rational business purpose.
“No less interestingly, the tax and VAT affairs of the several respondents were not in order. Not only were returns outstanding, some for several years, but the income streams, especially payments from the NHLS contracts, to the several respondents could not be matched with the VAT that would, by inference, be due and payable,” reads part of the judgment.
From 2017 to 2021, based on the bank accounts, Ndlovu had a gross income of R72 590 000 million.
Sars has consequently hit him with an R36 840 000 estimated tax liability for those years.