Court suspends taxman's contract with collection agency

The High Court in Pretoria has ordered the suspension of a controversial contract between the South African Revenue Service (SARS) and Lekgotla Trifecta Collections (LTC), which won a bid to collect billions in taxpayer debt.

By Genevieve Quintal

17 Nov 2016

Court suspends taxman's contract with collection agency

SARS announced last month that it had approached the court seeking an immediate termination of the contract.

This followed LTC's failure to declare a potential conflict of interest between its director, Nhlamulo Ndhlela, and SARS commissioner Tom Moyane. Ndhlela is Moyane's nephew.

The Mail and Guardian reported in July that Ndhlela was granted the debt collection contract, with a fee estimated at 10%, or up to R220m.

At the time, SARS said Moyane was not aware that his nephew was a shareholder in LTC.

In its urgent application, SARS said it sought to interdict LTC from performing any services under the Master Service Agreement and Service Request Agreement entered into between the two.

The application was heard on Wednesday. The court ordered that from 18 November, LTC was not allowed to take any further steps to implement the agreements. It was also ordered to return all confidential taxpayer information to SARS.

The revenue service welcomed the court's decision.

"The successful outcome of today's urgent High Court proceedings is in the best interest of the public and underscores SARS' dedication to the rule of law," it said.

SARS said it was still continuing with an application to set aside LTC's appointment to its panel of debt collection service providers.

Source: BDpro

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