City of Tshwane finally clears R4bn SARS debt

JOHANNESBURG - The City of Tshwane has finally paid off its R4 billion debt to the South African Revenue Service (SARS) connected to the irregular PEU smart meter project. 

In 2013, the city entered into a multibillion-rand deal with PEU Capital Partners for the provision of smart prepaid electricity meters. A few years later, the deal was found to be unlawful by the courts.

However, it left the city with a bill of about R4 billion in value-added tax (VAT) and penalties, which it owed the revenue service.

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At a media briefing on Wednesday, the multiparty coalition government in Tshwane said it made its final payment to SARS in March.

This brings an end to a bill that has outlasted several administrations and resulted in some of the city’s adverse audit findings. 

Tshwane Mayor Nasiphi Moya said this was a relief for the city’s finances.

“Remember, this R4 billion was not budgeted for when the city realised we were owing SARS. So the fact that this cash can be redirected to other commitments is a good thing for the cash flow of the city.”

Moya said this was not the end of the story as the municipality still needs to hold the officials accountable.