Sars deducts billions from RAF for ‘Eskom payments' despite court interdict

The Citizen

2 days ago

Claims it had no choice otherwise National Treasury's records 'would not be accurate'.
There is no official comment about Finance Minister Enoch Godongwana reportedly having been due to provide 'a certain affidavit' to the court since April. Picture: Moneyweb
The South African Revenue Service (Sars) has, despite being interdicted from doing so, deducted R5.07 billion of the R5.1 billion it planned to deduct from the fuel levy payments it makes to the Road Accident Fund (RAF) – the R5.1 billion being the 'diesel refunds' amount Sars has agreed to pay Eskom.
This was confirmed on Wednesday by RAF head of communications McIntosh Polela in response to questions emailed to the fund on 13 June.
Moneyweb reported on 17 June that the RAF had applied for a contempt of court order against Sars because of its alleged failure to adhere to an interim interdict obtained by the fund in the High Court in Pretoria on 26 March 2025.
The interim interdict prohibits Sars from deducting R5.1 billion – or any part of this amount – from the RAF fuel levies it collects and pays to the fund.
Moneyweb requested comment from Sars, also on 17 June, about the alleged continuation of these deductions following the issuing of the interim interdict but has not yet received a response.
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Deductions continued
Polela said Sars made its most recent deduction on Monday this week, and up to that date (23 June) has deducted a total of R5 072 360 844.85.
He said deductions made by Sars to the monthly fuel levy payments it makes to the RAF were made this year on:
20 February (before the interim interdict prohibiting the deductions was issued)
28 March
22 April
27 May
23 June.
Sars's alleged non-adherence to the interim interdict emerged in a parliamentary portfolio committee on transport meeting with the RAF on 11 June.
Suspended RAF CEO Collins Letsoalo appealed to the portfolio committee to help the RAF with the issue of non-payment by Sars.
'Sars has acted recalcitrant,' said Letsoalo at the time.
'In fact, we have opened a case of contempt of court against them.'
He added that, since April, Minister of Finance Enoch Godongwana is supposed to have submitted 'a certain affidavit' to court on an urgent basis, but he has not done this and 'so they [Sars] keep on deducting the money'.
'Sars is unlawfully deducting our money. I hope this portfolio committee will write to them and ask them because clearly the ministry has not helped us,' he said.
Questioned by portfolio committee chair Selelo Selamolela about the issue, Letsoalo said the RAF won its case against Sars, but the tax authority ignored the court order and still deducted the money.
He indicated that by then – 11 June 2025 – he was sure Sars had probably deducted R5 billion of the money.
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What does Treasury say?
Moneyweb requested comment from National Treasury on 13 June about Godongwana's alleged failure to submit an affidavit to court related to the RAF's contempt of court application against Sars.
Moneyweb also asked National Treasury if it could confirm that Sars continued to deduct amounts from the monthly fuel levy payments it makes to the RAF after the high court interdict was issued – and, if so, for comment about these deductions while an interdict prohibiting these deductions is in place.
It responded last week, stating: 'The matter is before the court therefore, the National Treasury cannot comment until a ruling has been made.'
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Original dispute was with Eskom
The dispute between the RAF and Sars relates to 'diesel refunds' claimed by Eskom in terms of the Customs and Excise Act.
A dispute between Sars and Eskom arose when Sars decided that Eskom was not entitled to the diesel refunds for a period of about 30 months between 2019 to 2021.
However, Sars and Eskom then entered into a settlement agreement on 17 October 2024 in terms of which Sars claimed it was obliged to pay Eskom an amount of about R5.1 billion.
But Sars only informed the RAF of this agreement on 12 November 2024 – and that it would recoup the R5.1 billion from the RAF levies over a two-month period, which was subsequently extended to five months.
Despite the RAF declaring a dispute with Sars in December 2024 in terms of the Inter-Governmental Relations Framework (IRF) Act and the ongoing dispute resolution process in terms of this act, Sars deducted the first tranche of about R1.2 billion from the RAF monthly levy payments. The fund only became aware of this deduction on 26 February 2025.
Sars claimed it had no choice but to proceed in deducting/recouping the money because, if it did not, National Treasury's records would not be accurate.
This resulted in the RAF lodging its urgent high court application.
In a judgment handed down on 26 March 2025, Judge Ronel Tolmay said she was informed by counsel representing Sars that the certificate to National Treasury regarding the second tranche payment would be issued the same day she was hearing the matter.
Tolmay interdicted and prohibited Sars from making the deductions, declaring the order operative for a maximum of 45 days from the date of the judgment, or until the dispute in terms of the IRF Act has been resolved.
It is unclear when the RAF's contempt of court application against Sars will be heard.
This article was republished from Moneyweb. Read the original here.