Johannesburg – More than two years after they were reinstated, some employees at the City of Joburg are still in a spot of bother – this time regarding tax compliance.
The saga dates back to 2022 when the Democratic Alliance (DA) took over running the City of Joburg from the African National Congress and let go of about 130 employees whose fixed-term contracts had been changed to permanent employment.
Despite court challenges by the unions, the employees were eventually terminated by the DA-led Council by simply rescinding the affected employees’ permanent employment and placing them back on fixed-term contracts, which were expiring soon after.
RELATED: City Of Joburg Says 130 Jobs Will End Next Week, SALGBC Gives Nod
However, the employees were reinstated on 29 February 2024, as per an order issued by acting Judge Moorcroft.
RELATED: SAMWU Victory: 78 Dismissed City Of Joburg Staffers Get Jobs Back After Court Order – The Bulrushes
The employees were back-paid for the 22 months they were out of the job, resulting in a high tax band, which has proved difficult to adjust – now that they are earning standard salaries.
An affected employee, who spoke on condition of anonymity, said: “It became clear with the 2025 submission period that City was battling with the fulfillment of tax obligations from the 22 months’ back payment employees received in three tranches”.
The tax matter was further complicated for those employees who had withdrawn lump sums from their pensions during the 22-month employment hiatus.
“For the most part, the City failed to use the correct codes aimed at lowering the tax burden on employees who didn’t resign or cash their pensions but are instead returning to work after reinstatement linked to lump sum processed in terms of the three-month payment plan,” explained the employee.
“When they failed to engage SARS on the issue, the revenue collector taxed the lump sum payment plus their annual salaries as income for one taxable year as per their regulations.”
For most employees, this was around 45%.
“Things took a turn for the worse earlier last month when SARS issued a directive to amend 2025 ARPs to properly reflect accurate payments to employees for the 2024 lump sum,” the employee said.
The directive is primarily based on a potentially reportable irregularity in terms of section 45 of the Auditing Professions Act of 2005, as there could be maladministration of the process, which included a retroactive pension fund contribution for the 22 months to eJoburg managed by Momentum.
The employee, who spoke for other employees, said the directive was “blocking us from submitting our tax returns, as the city is failing to comply”.
He added: “Besides being deprived of a deserving refund as per accurate EMP return info to SARS, we now run the risk of being truant taxpayers. This is not reflected explicitly.”
This matter affects many of the reinstated employees, who have been trying to get it resolved without any success.
“We tried engaging management to no avail. Management appeared indifferent to their plight at the time,” the employee said.
Several attempts by The Bulrushes to get comment from the City of Joburg have gone unanswered.
