More than a R1bn in personal protective equipment (PPE) tenders went to politically connected persons and 63% of the companies were not even tax compliant – a basic requirement of the normal government tender system.
Business Day quotes SA Revenue Service (SARS) commissioner Edward Kieswetter as saying that tax compliance is one of the basic requirements of the normal government tender system, which was set aside to allow emergency procurement of PPE and other equipment to address the urgent needs generated by COVID-19.
A total of 63% of all the companies awarded PPE tenders were not tax compliant. Kieswetter also said in his keynote speech at the SA Institute of Tax Professionals’ annual tax indaba that 22 of the companies that won R1.3bn of the R2bn of tenders awarded were linked to politically exposed people.
Most of those who were successful in winning tenders had no previous experience in the PPE business and were involved in businesses such as IT shops, car-washing bays, property letting companies, bakeries, events management companies and so on.
“Many of them received funds and transferred those funds into third-party accounts, So it just smells of impropriety and we will not rest to … ensure that those companies honour the system by paying taxes. Having obtained work and income from the state the least they can do is to pay their taxes,” Kieswetter is quoted in the report as saying.
Separately, Kieswetter also told a SA National Editor's Forum webinar that the audit had so far revealed that PPE tenders worth more than R1 billion were awarded to politically exposed individuals, through about 22 companies. Pubs, car washing businesses, bakeries and events companies all managed to score contracts, despite never previously having operated in the health field.
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