President agrees to intervene as the tumultuous rift between the Sars commissioner and the finance minister comes to a head
The tension between the country’s two highest-profile individuals entrusted with public funds has escalated to such high levels that President Jacob Zuma has been asked to intervene. SA Revenue Service (Sars) commissioner Tom Moyane confirmed to reporters at a media conference at Sars’ offices in Pretoria on Friday that he had asked Zuma to get involved. He further lashed out at Finance Minister Pravin Gordhan for attributing a R30 billion tax collection deficit to his administration.
Presidency spokesperson Bongani Ngqulunga confirmed that Moyane wrote to Zuma asking for intervention. “The matter is being looked into,” Ngqulunga said.
The war of words between the two has continued since reports of the alleged existence of a rogue unit with Sars surfaced, as well as reports that Moyane had opened a case against Gordhan – allegations that Moyane described as “lies” on Friday.
He also denied that he had knowledge of a “family” he was allegedly reporting to, saying he never discussed his work – not even with his wife.
Moyane told reporters that he approached Zuma since he and Gordhan were appointed by the president.
“I am waiting for the president to revert with regard to the appointment of a referee to adjudicate differences between the minister and Sars. In light of the pending adjudication, I am not able to divulge further details,” Moyane said.
Part of the adjudication could result in the appointment of an independent judge or third party to resolve the impasse.
However, he also seemingly offered an olive branch to Gordhan, saying he was willing to meet with him to sort out their differences.
“I concede that, on a personal and professional level, my relationship with the minister has not been cordial, but rather strained. In the interest of South Africa and in particular Sars, I am willing to engage with the minister, with or without the intervention of a third party, in order to resolve whatever personal or professional differences may exist.
“It is my conviction that the current economic conditions require that both the minister and I need to engage and map a constructive way forward so as to retain public confidence in both Sars and National Treasury. As veterans of the struggle for the liberation of South Africa, we are duty-bound to put the interest of the country above any differences,” Moyane said.
This comes a few days after Gordhan delivered his budget speech.
Moyane said the fact that Gordhan blamed Sars for the R30 billion deficit posed serious challenges to the overall credibility and effectiveness of Sars.
“It is unfortunate that this happens at this particular time with only five weeks away from the end of the 2016/17 financial year.
“As customary, the final quarter of any financial year is characterised by a step-up in engagements with taxpayers to ensure that reconciliations are timeously carried out and outstanding returns and payments are finalised. Any interruption or distortion in this well-established practice will impact negatively on the attainment of the 2016/17 revenue estimate of R1.1444 trillion. It has the potential to adversely affect the overall fiscal framework of South Africa. The erosion of our public finance framework in this manner will have serious consequences for all South Africans, especially the most vulnerable in society.”
Moyane said revenue estimates were based on macroeconomic indicators developed by National Treasury.
“This set of assumptions is then considered by a committee of technical experts comprising the SA Reserve Bank, Sars and National Treasury.
“Based on a consensus-seeking process, the committee recommends a revenue estimate to the minister of finance.”
The R30 billion deficit for the 2016/17 financial year, according to the 2017 budget, was attributed to:
Customs duties being down by R6.5 billion as a result of contraction in real terms in imports.
VAT, similarly being dragged down by import VAT collections to an underperformance by R11.3 billion.
Personal income tax, for long being the anchor of revenue collections, underperforming by R15.2 billion.
The Sars commissioner said his relationship with Gordhan was “strained”.
Moyane said the challenges between National Treasury and Sars were mainly “characterised by the cult of personality” between Gordhan and himself.
He accused Gordhan of “unreasonable delays” in approving key appointments and “undue interference” in operational matters.
“The point of departure with the minister arises from the minister’s insistence in irregularly interfering in the operations of the institution, such as approval of leave for senior Sars employees, salary increments and bonus payments for Sars employees.”
Moyane denied that he had paid himself a bonus, saying he was still waiting for Gordhan’s determination on whether he should be paid a bonus and how much.
He said the powers to administer the operations and expenditure of Sars were “exclusively vested” in him in terms of section 9 of the Sars Act, as both the CEO and
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“Furthermore, sections 50 and 51 of the Public Finance Management Act vest fiduciary duties of administering Sars in the Sars commissioner as its accounting authority. The minister and the office of the commissioner are only vested with powers enshrined in the Public Finance Management Act and the Sars Act.”
Moyane also announced that he had asked the State Security Agency (SSA) to investigate who leaked a document to the media.
He was not referring to the document that was the basis of articles carried by the Mail & Guardian this week, but another report that was leaked to the media earlier.
He said he had taken his decision after Gordhan stated that there were elements within Sars that leaked said report.
Moyane said the SSA had found that the leak came from Treasury, not Sars.
Questions were sent to National Treasury on Friday afternoon following Moyane’s media conference, but a response had not yet been received by the time of publication on the same afternoon. We will carry any response we receive online or in our next issue.
EMBATTLED Pravin Gordhan