Pres­i­dent agrees to in­ter­vene as the tu­mul­tuous rift be­tween the Sars com­mis­sioner and the fi­nance min­is­ter comes to a head

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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

Do you be­lieve Pres­i­dent Ja­cob Zuma can end the war be­tween Fi­nance Min­is­ter Pravin Gord­han and Sars com­mis­sioner Tom Moy­ane? How should he go about re­solv­ing the con­flict?

SMS us on 35697 us­ing the key­word SARS and tell us what you think. In­clude your name and prov­ince. SMSes cost R1.50 ac­count­ing author­ity.

“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

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