Gordhan hails Gupta leaks in revealing Sars rot

PUBLIC Enterprises Minister Pravin Gordhan has hailed the Gupta leaks as having played an important role in uncovering the alleged rot in Sars under suspended commissioner Tom Moyane.

Gordhan was the first witness to testify before a commission probing the lax tax administration following a directive from President Cyril Ramaphosa last month.

The commission is led by retired judge Robert Nugent.

Gordhan was quick to admit that he was not aware of the magnitude of the rot in Sars until the famous publication of the Gupta leaks in 2016.

“The Gupta leaks helped me to understand what is happening in Sars. In December 2015, I gave the commissioner 10 questions to answer why the modernisation plan was discarded. I did not get an answer. It did not happen. I was told we needed to continue. It was only after the leaks appeared that I understood what was happening there,” Gordhan said.

He said he ordered Moyane to stop making changes to the modernisation plan he introduced as Sars commissioner prior to his initial appointment as Finance Minister in 2009.

In one of the Gupta leaks it was reported Moyane allegedly authorised the payment of a R70 million VAT refund to a Gupta-linked company.

The report stated that Oakbay director Ronica Ragavan e-mailed Moyane in May 2016, requesting him to pay the first of the three VAT payments amounting to R70m into Terbium Financial Services account for the benefit of Oakbay.

Terbium was a payment agent of the Guptas to manage the payment of staff salaries after the country’s four major banks in 2016 severed ties with the family following the accusations of state capture and corruption against them.

According to the leaks, the payments were made despite warnings that the law did not permit the payment of VAT refunds into third party accounts to prevent fraud and money laundering.

At the time, Moyane was adamant that he did nothing wrong in approving the transactions.

Gordhah told the commission that what he learnt in 2016 and the Gupta leaks made him to connect the dots.

During his cross examination, Gordhan testified that in December 2015 he was appointed Finance Minister after then president Jacob Zuma fired his predecessor Nhlanhla Nene. He said that among his immediate duties, following his appointment on December 13, 2015, he managed to secure a meeting with Moyane on December 15 to find out why the “modernisation plan” set up by Sars in 1997 was abandoned.

According to Gordhan, the “modernisation plan” was a set of rules implemented to ensure effective revenue collection and to enhance the ability of Sars to recruit the best people with skills to do that job.

Gordhan said tax collection between 2006 and 2009 was good, adding that during the 2006 and 2007 financial year, Sars collected R541.2 billion, in 2007/8 it collected R627.6bn, in 2008/9 R625.1bn, and in 2009/10 it collected R657.5bn.

Gordhan also testified about how he was accused of having influenced the early retirement package for Ivan Pillay, saying these were just meant to tarnish his image for asking about the problems at Sars.

Gordhan also denied accusations that the reason his modernisation plan was reversed was due to its alleged failure on Black Economic Empowerment. In his reply, Gordhan said his accusers must read his annual reports since he was commissioner. He said there was little black representation when he took over, and he went on a massive recruitment drive.

More damning evidence of alleged impropriety is expected to be heard today.