SARS Lifts the Lid on Lucky Montana’s R55 Million Tax Debt After Fraud Allegations
The South African Revenue Service (SARS) has publicly revealed that former Passenger Rail Agency of South Africa (Prasa) CEO Lucky Montana owes more than R55 million in unpaid taxes — after he accused the agency and its commissioner, Edward Kieswetter, of fraud and political persecution.
At a media briefing on Saturday, SARS said Montana’s total tax debt stands at R55 133 282.94, and that he has offered to settle it with a compromise payment of R5.4 million.
The disclosure marks a rare move by the tax authority to make a taxpayer’s confidential information public, but SARS said it was compelled to do so in order to “counteract false statements that may undermine public confidence in the tax system.”
SARS national spokesperson, Siphithi Sibeko, said it was “untenable for Mr Montana to publicly attack SARS and its officials, whilst simultaneously seeking a compromise of a tax debt he accepts”.
Fraud and ‘fake judgment’ claims
Montana, who once headed the embattled state-owned rail agency, recently alleged that he had laid a fraud complaint against Kieswetter and other SARS officials.
He accused the commissioner of “doctoring a fake court judgment” to justify a sequestration application against him, and claimed the matter formed part of a politically motivated “witch-hunt”.
SARS, however, said it had “no choice” but to release details of his case after Montana ignored a 24-hour ultimatum to retract his allegations.
Sibeko rejected the claim that the case was politically driven, stating that the tax issues predate Montana’s involvement in politics and go back as far as 2011.
A decade of unpaid taxes
According to SARS, an audit of Montana’s tax affairs covering 2009 to 2019 began after he failed to submit returns for the 2017, 2018 and 2019 tax years. He was first notified of the audit in November 2020 and asked to submit supporting information by 4 December that year.
After requesting and receiving an extension to 1 February 2021, Montana failed to comply. A final demand was issued the following day, and when no response came, SARS completed its audit in July 2021.
The audit found that Montana had under-declared taxable income from various sources over the ten-year period. A Letter of Findings was issued, advising him that SARS intended to raise additional income tax assessments of R15.5 million.
He was given 21 business days to respond but asked for an extension until 16 August 2021. According to SARS, Montana’s response failed to address most of the findings.
“Instead of using the opportunity, Montana elected to attack SARS by making unsubstantiated and unfounded allegations against SARS, accusing it of ‘vindicative action’ and conducting a ‘witch hunt’,” said Sibeko.
Assessments and escalating debt
SARS went ahead with the assessments and, in April 2022, issued a Finalisation of Audit letter informing Montana that he was liable for R28 million in taxes and penalties for under-declared income. He had until 26 May 2022 to lodge an objection.
Montana again requested extensions and submitted what SARS called a “partial objection”, which contained “unsubstantiated and unfounded allegations”. Another extension to 1 July 2022 was granted, but a further request for 30 more days was denied.
When he still failed to pay, SARS issued a final demand on 11 July 2022 and began recovery proceedings.
By September 2022, Montana wrote to SARS stating that he had not been home when a summons for the R44 million default judgment was served. He said he would respond to the judgment “once we have had time to peruse and evaluate it”.
However, Sibeko noted: “The fact that Montana has, after all this time, still not applied to the High Court for the tax judgment to be rescinded is significant. It is by now no longer open for him to do so.”
Objections and deadlines ignored
SARS said Montana’s purported objection was declared invalid in November 2022, and he was given until 31 January 2023 to submit a valid one. But in December 2022, Montana told SARS that he had no intention of filing another objection, insisting that his 20 September 2022 submission was sufficient.
By January 2023, SARS informed him that no further late objections would be accepted.
“In terms of the Tax Administration Act, the additional assessments have therefore become final and are no longer open to dispute,” said Sibeko.
He added that Montana’s claim of only recently discovering the extent of his tax liability was “false and dishonest”.
SARS proceeds with sequestration
Despite the public spat, SARS confirmed that sequestration proceedings against Montana would continue. Sibeko told News24: “He’s made an offer [of R5.4 million] which we will consider and take a decision based on that.”
SARS explained that, under the Tax Administration Act, a taxpayer must accept that the debt is due and payable before a compromise can be considered. Montana’s proposal, therefore, is seen as an admission of liability.
Years of defiance
According to SARS, Montana’s tax troubles began when he repeatedly missed deadlines, ignored correspondence, and failed to meet audit requirements. His debt, initially around R15 million, ballooned through interest, penalties, and additional assessments to more than R55 million.
Sibeko stressed that the agency’s actions were purely administrative: “SARS is apolitical. The notion that this is a political witch-hunt is baseless.”
Montana, for his part, insists that SARS “abused its powers” and “fraudulently doctored” documents. He maintains that the actions against him are politically motivated.
SARS, however, says the record speaks for itself. It maintains that it followed due process for over four years before resorting to enforcement measures.
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