TOM MOY­ANE

CityPress - - Business And Tenders - JUSTIN BROWN, DE­WALD VAN RENS­BURG and XOLANI MBAN­JWA busi­ness@city­press.co.za

Fi­nance Min­is­ter Pravin Gord­han came out fir­ing on Fri­day in his tense show­down with SA Rev­enue Ser­vice (Sars) com­mis­sioner Tom Moy­ane, and by ex­ten­sion Pres­i­dent Ja­cob Zuma, over the so-called rogue Sars spy unit. “There is a group of peo­ple not in­ter­ested in the eco­nomic sta­bil­ity of this coun­try and the wel­fare of its peo­ple,” he said in a state­ment.

“It seems they are in­ter­ested in dis­rupt­ing in­sti­tu­tions and de­stroy­ing rep­u­ta­tions.”

He threat­ened le­gal ac­tion to pro­tect him­self and “Na­tional Trea­sury from what­ever el­e­ments are seek­ing to dis­credit me, the in­sti­tu­tion and its in­tegrity”.

He said he could “cat­e­gor­i­cally state that the Hawks have no rea­son to in­ves­ti­gate me”.

Gord­han pointed out that he had not re­ferred to the Sars dif­fi­cul­ties in his bud­get speech.

The key source of ten­sion be­tween Gord­han, Zuma and Moy­ane is the al­leged Sars “rogue unit”, which is ac­cused of us­ing il­le­gal meth­ods to gather in­for­ma­tion.

A KPMG re­port, com­mis­sioned by Moy­ane, al­leged Gord­han was re­spon­si­ble for a unit that al­legedly probed Zuma and his al­lies.

Gord­han on Fri­day con­firmed in a state­ment that he had been ap­proached by the Hawks. He said the Sars unit in ques­tion – of­fi­cially known as the Na­tional Re­search Group – and sub­se­quent in­ves­tiga­tive units, had been legally con­sti­tuted and ap­proved at min­is­te­rial level. Be­tween 2007 and 2013, th­ese units as­sisted law en­force­ment agen­cies in com­bat­ing crime, seiz­ing il­le­gal to­bacco and drugs, clamp­ing down on out­stand­ing cus­toms du­ties, rais­ing tax as­sess­ments on de­fault­ing tax­pay­ers and preserving as­sets. The value of th­ese ac­tiv­i­ties amounted to about R2.8 bil­lion.

The fi­nance min­is­ter at the time was Trevor Manuel. He was quoted on Fri­day as say­ing that he would fire Moy­ane were he still fi­nance min­is­ter.

Zuma is­sued an am­bigu­ous state­ment, say­ing he had full con­fi­dence in Gord­han and “ru­mours and gos­sip which insin­u­ate some con­spir­acy against Min­is­ter Gord­han ... [are] base­less”.

He also said he would not com­ment on mat­ters re­lat­ing to Sars, as they were be­ing han­dled by law agen­cies.

What was ev­i­dent this week was that there is no love lost be­tween Gord­han and Moy­ane.

It has been re­ported that Gord­han has threat­ened to re­sign if Moy­ane does not leave.

Moy­ane was ab­sent from Gord­han’s bud­get

TPROFILE:

om Moy­ane is the in­cum­bent com­mis­sioner of the SA Rev­enue Ser­vice (Sars). He has held the po­si­tion since Septem­ber 2014. Prior to his ap­point­ment as the Sars boss he was an ad­viser on the turn­around and se­cu­rity strate­gies of the State In­for­ma­tion Tech­nol­ogy Agency. He is a for­mer na­tional com­mis­sioner for the depart­ment of cor­rec­tional ser­vices and has also served as chief ex­ec­u­tive of the govern­ment print­ing works.

He was pre­vi­ously the man­ag­ing di­rec­tor of En­gen Mozam­bique. Moy­ane has also worked for the depart­ment of trade and in­dus­try. He was the chief di­rec­tor for in­dus­try and en­ter­prise de­vel­op­ment there.

WHAT WILL KEEP HIM IN HIS PO­SI­TION:

His re­la­tion­ship with Zuma. He is known as a Zuma loy­al­ist. As a re­sult, the pres­i­dent may side with Moy­ane, re­gard­less of the con­se­quences.

WHAT MIGHT GET HIM FIRED:

1He

is likely to miss the rev­enue-col­lec­tion tar­get for the 2016 fis­cal year. The pro­jected to­tal tax rev­enue for the year was R1.081 tril­lion, but the re­vised es­ti­mate is R11.6 bil­lion short of that to­tal.

Govern­ment’s tax rev­enue is vi­tal, given the slow­down in the econ­omy and the risk of a credit rat­ing down­grade – rat­ings agen­cies are par­tic­u­larly con­cerned about the state’s rev­enue-col­lec­tion plans. 2His

ten­ure at Sars has been marked by the purge of a num­ber of top Sars of­fi­cials, which has dis­rupted the run­ning of the unit. 3What

also counts against him is that while he was head of cor­rec­tional ser­vices, the depart­ment was cen­sured by the Au­di­tor-Gen­eral. speech me­dia con­fer­ence and, when asked about Moy­ane’s ab­sence, Gord­han, with­out men­tion­ing the com­mis­sioner’s name, said Sars had is­sues that needed to be re­solved and he had con­fi­dence in the 14 000 Sars em­ploy­ees, but made no ref­er­ence to Moy­ane.

Mike Schus­sler, from econ­o­mists.co.za, said: “Pravin has to stay. We have no choice as a coun­try. We saw how the mar­kets re­acted to the changes in Na­tional Trea­sury in De­cem­ber. Right now the whole coun­try needs sta­bil­ity.”

The rand on Fri­day weak­ened to above R16 to the dol­lar for the first time since Fe­bru­ary 9.

Nazrien Kader, head of Deloitte Africa Tax Ser­vices, warned that if Gord­han fol­lowed through with his re­ported threat to re­sign un­less Moy­ane was re­moved, it would be “dis­as­trous” for the coun­try as a whole.

“Sars has been sta­ble, with a good strat­egy, and they con­tinue to col­lect tax and en­force com­pli­ance, but we have not seen the re­sults of Moy­ane’s turn­around strat­egy, whether good or bad. It would be im­por­tant for the sake of the coun­try to keep that rep­u­ta­tion of Sars in­tact, and at this stage it’s only log­i­cal that Gord­han can­not leave,” she added.

Keith En­gel, CEO of the SA In­sti­tute of Tax Pro­fes­sion­als, said: “I don’t think Gord­han will go. Moy­ane might get re­placed, or he might not.” En­gel said the shenani­gans were tar­nish­ing Sars’ rep­u­ta­tion as a “squeaky clean” or­gan­i­sa­tion and could breed tax­payer un­hap­pi­ness.

The chop­ping and chang­ing of fi­nance min­is­ters in De­cem­ber re­sulted in the rand weak­en­ing to a record low against the US dol­lar. JSE stocks lost tens of bil­lions of rands in value.

A se­nior Sars in­sider said the main bat­tle be­tween Gord­han and Moy­ane heated up soon af­ter the for­mer was reap­pointed Moy­ane’s boss.

The in­sider said: “Moy­ane feels he can’t be seen as cow­er­ing to his new boss now af­ter the KPMG re­port, com­mis­sioned by Sars, al­leged that Gord­han knew about the ‘il­le­gal ac­tions’ of the spy unit. Gord­han has made it clear he dis­agrees with that re­port’s al­le­ga­tions. If Moy­ane were to be seen to be tak­ing a softer ap­proach against Gord­han now, it would look like he is try­ing to save him­self. Moy­ane is stand­ing his ground and he is that type of per­son.”

Th­ese events all keep the coun­try’s credit rat­ing at risk of be­ing down­graded to junk sta­tus this year.

Moy­ane kept quiet this week about his clash with Gord­han. He de­clined to com­ment when City Press phoned him.

Moy­ane may feel se­cure on the ba­sis that he is a strong Zuma ally.

Sars spokesper­son Sandile Memela re­ferred all ques­tions sent to him to Gord­han’s of­fice.

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