Court Rules in Favor of SARS to Keep Royal AM Football Club Suspended
The South African Revenue Service (SARS) has intensified its enforcement actions against Shauwn Mkhize, owner of Royal AM Football Club, with a recent raid on her Durban mansion and the club’s Pietermaritzburg headquarters as part of efforts to recover an outstanding R40 million tax debt. This follows a series of court victories for SARS, which have upheld preservation orders against Royal AM and the Shandi Trust, leading to the football club’s suspension from the National Soccer League (NSL).
The South African Revenue Service (SARS) has successfully defended its preservation orders in court against the Shandi Trust and Royal AM Football Club, both controlled by Ms. Mkhize. The judgments, issued by the North Gauteng and KwaZulu-Natal High Courts, further solidify SARS’ stance on tax compliance and enforcement.
Key Developments
Preservation orders upheld
In 2024, SARS secured two preservation orders to freeze the assets of the Shandi Trust and 23 respondents, including Royal AM FC, due to alleged tax non-compliance. Courts have now upheld these orders, rejecting appeals.Club’s suspension from the NSL
Facing financial difficulties, Royal AM was suspended from playing in the National Soccer League (NSL) on 22 January 2025 due to concerns about its ability to meet its obligations for the season.Court rejects urgent application
On 29 January 2025, the club filed an urgent court application against SARS, the NSL, and the court-appointed curator, requesting permission to continue playing in the league. The court struck the case off the roll on 5 February 2025, citing a lack of urgency, with costs awarded against the club.Shandi trust’s appeal dismissed
The Trustees of the Shandi Trust also attempted to appeal the preservation order against them. Their application was dismissed on 6 February 2025, as the court found no valid grounds for the appeal.
What This Means for Taxpayers
SARS is sending a strong message that non-compliance will have severe financial and legal consequences. Here are the key takeaways:
Preservation orders are a serious step. SARS can freeze assets when it believes a taxpayer is evading tax obligations. Once granted, these orders are difficult to overturn.
Tax debts can impact business operations. The case of Royal AM shows that tax compliance issues can lead to business disruptions, including suspension from major operations like the NSL.
Courts will not entertain self-created urgency. The club’s case was dismissed because it failed to justify why the matter was urgent demonstrating that taxpayers cannot delay compliance and then claim urgency when consequences arise.
SARS will pursue non-compliance aggressively. SARS Commissioner Edward Kieswetter emphasised that taxpayers must meet their tax obligations with the same enthusiasm as they approach legal challenges. SARS remains committed to making non-compliance hard and costly.
This case serves as a warning to businesses and individuals—tax compliance is non-negotiable, and SARS will use every legal avenue to enforce the law.
Read more in the SARS Media release.
