DJ Maphorisa is facing a legal dispute with the South African Revenue Service (SARS) over a tax claim of R3.3 million.
Documents from the court indicate that SARS first informed Maphorisa in July 2018 of its intention to perform an income tax audit due to unsubmitted returns.
The agency sought various documents, including IRP5 and IT3 certificates, records of investment income, and bank statements.
During a pre-trial discussion, Maphorisa reportedly stated that he filed his tax returns after the audit had commenced, mentioning that personal mental health issues contributed to the delays.
Upon concluding the audit, SARS raised concerns regarding deposits made into Maphorisa’s FNB account, asserting that these should be considered part of his unreported income.
In November 2018, SARS issued its findings, alleging that the artist had “intentionally evaded tax,” which resulted in a 200% penalty on the assessed amount.
“The respondent has proven the facts relied upon to impose the USP (understatement penalties) at the rate of 200% on the basis that the appellant’s conduct is correctly classified as intentional tax evasion,” stated the court documents.
SARS finalized the audit in December 2018, utilizing available bank information after Maphorisa allegedly did not respond to its findings. This resulted in assessments exceeding R3.3 million.
The artist subsequently filed formal objections in 2022, contesting the assessments for the tax years 2015 to 2017.
However, these objections were rejected by SARS, leading Maphorisa to appeal in September 2022.
In his appeal, he contended that SARS had miscalculated his tax obligations and overlooked allowable expense deductions.
Furthermore, he argued that “the imposition of the USP by SARS has not been reasonable.”
The case is currently under review by the Tax Court, where Maphorisa aims to overturn the significant tax bill.
