Councils issue summonses for arrear levies

The summonses were served prior to the cut-off date of 30 June for the collection of unpaid RSC levies by councils in a 'last minute bid to raise their luck to collect revenue', said tax analysts yesterday. The sums involved run into millions for each company, some as much as R70m, says a Business Day report. 'These holding companies did not declare levies on dividend income and interest earned from loans provided to subsidiaries,' said Andre Meyburgh, a partner at KPMG. Said Erika Nauda, director of Rates and Taxes at the municipality: 'Legislation makes specific reference to the fact that legal action may be taken when companies have misrepresented themselves or understated their levies payable.' Some of the issues in dispute issues lie in the interpretation of the Act. However, the city has a legal obligation to collect all money due to it. 'Therefore, since the RSC prescription period was coming to an end, the city issued summons against all customers who, in our view, owe us money,' she said. The RSC Act provided for a prescription period of two years during which unpaid levies could be collected. Full Business Day report