The Bloemfontein Magistrates’ Court has imposed a hefty sentence upon Newtongate (Pty) Ltd for a tax evasion charge arising from misrepresentation of profits from Covid-19 personal protective equipment (PPE) deals. The Tebang Motaung-owned company was sentenced on Tuesday, 27 November, after it was found guilty of contravention of the Tax Administration Act.
The company was ordered repay the South African Revenue Service (Sars) R756 259.55.
WO Fikiswa Matoti, provincial spokesperson of the Hawks, said the amount was in addition to a fine for R1 million, which is wholly suspended for five years on the condition the company is not convicted of fraud during the period of suspension.
“The company was ordered to pay Sars an amount of R756 259.55, in instalments of R60 000 on or before 31 March 2024. Thereafter, the company should continue paying instalments of R32 000 on or before the seventh day of each month, with the final instalment to be made on or before 28 February 2025,” said Matoti.
The sentencing is a result of the coordinated investigations by the Hawks’ Serious Commercial Crime Investigation unit and Sars. The findings reveal that Motaung misrepresented Newtongate’s trade activities between September 2020 and May 2021 by submitting value-added tax returns (VAT201 declarations) reflecting zero income.
Matoti said probing discovered that during 2021, the Free State Department of Treasury had awarded the company a tender to supply Covid-19 protective equipment.
“It happened that Motaung, as the director of Newtongate, underdeclared his company’s tax status, submitting a nil tax return through eFiling.
“Sars detected the irregularity and began with an internal investigation which uncovered that Newtongate (Pty) Ltd received business income and incurred expenses, despite it submitted a nil return. In the process, Sars was prejudiced and suffered a total loss of R757 068.94,” said Matoti.
Phaladi Shuping, former provincial spokesperson of the National Prosecution Authority (NPA), had indicated that probing revealed that Motaung’s company was awarded three contracts worth R6,4 million to supply Covid-19 equipment.
