Sunday Times

War between top guns in SA fiscus bursts into the open

SARS chief Tom Moyane takes a shot at Finance Minister Pravin Gordhan over tax collection

- ASHA SPECKMAN and LUTHO MTONGANA

THE depths of the ugly row between SARS commission­er Tom Moyane and Finance Minister Pravin Gordhan were laid bare on Friday, highlighti­ng fractures in a government at war with itself.

Moyane, at a hastily convened press conference, accused Gordhan of antics fit for a tyrant and posing a challenge to the tax collector’s credibilit­y and effectiven­ess. He said he had asked the State Security Agency to investigat­e the leaking of correspond­ence between them.

Moyane’s actions came in response to comments by Gordhan during his budget speech on Wednesday, suggesting poor management at SARS was partly responsibl­e for weaker revenue collection.

Moyane said there was a serious breakdown in his relationsh­ip with Gordhan, whom he accused of behaving like a bully during meetings. “I find it very strange that in meetings he treats me as if I’m a nonentity. He shouts and screams.

“I have no problem with him. It’s a reality of fact. I’m not in a situation where I harbour any rancour or anger against the authority of the minister,” he said.

Moyane has asked President Jacob Zuma to appoint a third party to mediate difference­s between SARS and Gordhan.

Zuma’s spokesman, Bongani Ngnqulunga, did not respond to a request for comment, neither did the Treasury.

Daniel Silke, a political analyst, said: “Things are reaching a climax, perhaps with a view to a cabinet reshuffle that is probably imminent, which could involve the exit of Pravin Gordhan from the cabinet.”

Silke said the synergy between the two department­s was “absolutely fundamenta­l to the effective raising of revenue and fiscal management in South Africa. It’s untenable that there can be this level of personal distrust and animosity. This is an issue that should have been resolved many months ago.”

Xhanti Payi, a director at Nascence Advisory and Research, said the issue was a political one. Ratings agencies had warned that political noise could inhibit reforms being implemente­d to bring about economic growth. “If the relationsh­ips are breaking down in government and its agencies, then it’s a problem.”

The estimated tax revenue shortbers TAKING STRAIN: SARS commission­er Tom Moyane has accused Finance Minister Pravin Gordhan of interferen­ce in SARS operations. During a press conference in Pretoria on Friday, Moyane briefed the media on his response to Gordhan’s statements during his budget speech about a R30.4-billion state revenue shortfall fall is projected to widen to R30billion for 2016-17. This has forced the Treasury to squeeze taxpayers and add a new tax bracket for individual­s earning more than R1.5-million per year. The new tax bracket is expected to raise R16.5-billion.

On Friday, the Mail & Guardian published a series of leaked letters shedding light on the acrimoniou­s relationsh­ip between the pair.

Gordhan’s actions this week and his alleged neglect to acknowledg­e efforts by the 14 500 SARS staff membillion to collect revenue in difficult circumstan­ces appeared to have hit a raw nerve.

“We find it extremely regrettabl­e that the minister of finance elects to attribute the announced tax proposals to fill the revenue gap of R30billion to the performanc­e of the SARS administra­tion,” Moyane said.

“In fact, such utterances by a person as senior as the minister of finance poses serious challenges to the overall credibilit­y and hence effectiven­ess of SARS as an institutio­n.”

An interrupti­on or distortion in the final days leading to the close of the financial year would negatively affect SARS’s ability to reel in R1.41-trillion expected in taxes.

Moyane suggested a slide in economic growth projection­s from 1.2% since February last year to 0.5% forecast for 2016 overall was one reason for the lower tax collection.

This led to a R6.5-billion drop in customs duties collection as a result of a contractio­n in imports. The lower import VAT collection­s led to a R11.3leakages decline in overall VAT. Personal income tax — the main contributo­r to tax revenues — shrank as a result of lower wage settlement­s, bonus payments and also job losses.

Moyane accused the Treasury of leaking correspond­ence between himself and the minister to the media. He had asked the Secret Service Agency to conduct an investigat­ion which proved that there was no wrongdoing at SARS, he said.

“As a result, I have no alternativ­e but to reasonably suspect that the emanate from the office of the minister.”

Moyane said that conflict with Gordhan also involved the minister’s delays in approving senior appointmen­ts, interferen­ce by Gordhan in SARS operationa­l matters and a clash of personalit­ies; one was the appointmen­t of a chief officer for digital informatio­n services, which had been awaiting approval since July last year.

 ?? Picture: MOELETSI MABE ??
Picture: MOELETSI MABE

Newspapers in English

Newspapers from South Africa