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
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.