Former Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana has conceded he owes money to the South African Revenue Service (Sars), but says the tax authority overstated his liability by R21m in its audit for 2009-2019. Montana makes the argument in an affidavit before the Gauteng High Court in Pretoria, which was filed 18 months late. He filed the papers last month, weeks before his resignation as an MK party MP took effect, in a final effort to defend himself in a sequestration application by Sars.
The application seeks to grant Sars the authority to strip Montana of his assets to recover the outstanding tax debt and have him declared insolvent. According to Sars, Montana failed to declare R36m in income over 10 years and more than R2m in capital gains. When the sequestration application was initially made in 2024, the tax debt was about R44m, but it has ballooned to R55m with interest and penalties.
Montana disputes Sars’ methodology in calculating his debt — a stance which he has maintained since he was served with audit results in 2020. “In 2020, the major finding [of the 2009-2019 audit] was undeclared income of approximately R23m during the 10 years under review, which was taxable,” Montana says in his papers. “The amount payable to Sars would have been R9.89m if one were to apply [a rate of] 43%, which is the highest personal tax scale for the period I was employed,” Montana contends.
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Before the matter reached the court, Montana said he raised objections to the findings based on several factors, including Sars’ characterisation and assessment methodology of various transactions — in particular the issue of the primary residence exclusion, property sales and the application of capital tax gains and the sale of motor vehicles. “My calculations of these transactions indicated my tax liability was overstated by over R21m. It was on these bases that I disputed the amounts, and I argued I did not owe Sars a cent.” Montana also challenged Sars’ methodology on the sale of his cars.
“Sars raised taxes for six vehicles sold, which I purchased during this period [2009-2019] through hire purchase. Mercedes-Benz Financial Services and Absa Asset Finance financed the vehicles.
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