Sars ‘spy unit’ was above board – Gordhan
FORMER Sars head and Cooperative Governance and Traditional Affairs Minister Pravin Gordhan has defended the existence of the so-called spy unit within the revenue collector, charging that it was a legitimate effort to combat organised crime and tax evasion in South Africa.
Gordhan said the unit, which was established during his tenure as Sars commissioner, was known to the authorities and never involved itself in any illegal activities.
Gordhan said under his stewardship, Sars noticed a rampant increase particularly in the poaching and smuggling of abalone and tobacco in the country, which necessitated the establishment of the unit.
He said such units were known to assist tax and customs officials throughout the world. “The establishment of an additional unit within the enforcement division was entirely legal,” stated Gordhan.
“Any suggestion to the con- trary is rejected emphatically. It is, in fact, during my stint at Sars that a whole range of institutional checks and balances were set up to ensure that no individual had unfettered powers and discretion in applying the law.”
Purge
Gordhan’s uncharacteristically strong-worded swipe on the problems besieging the organisation he led with unparalleled excellence for years comes amid fears within Sars of a purge senior officials who reported to him.
The alleged cleansing of senior officials also came in the wake of the public fallout between the head of the unit Johan van Loggenberg and his erstwhile girlfriend Melinda Walters, a tobacco industry lawyer and self-confessed State Security Agency agent last year.
At the time Walters claimed that Van Loggenberg, then Sars group executive for tax and Customs investigations, had allegedly disclosed confidential information about investigations into the tobacco industry.
When current Sars boss Tom Moyane was appointed to the position in September, he initiated a commission of inquiry to look into the operations of the so-called rouge unit and suspended former acting commissioner Irvin Pillay and head of strategic planning risk group executive Peter Richer.
Pillay and Richer resigned last week after a settlement with Sars. But Gordhan has revealed how the unit was started and defended the decision as standard among tax collectors worldwide.
“Every revenue and customs agency of any consequence in the world has the capacity to implement a wide range of investigative and enforcement measures,” charged Gordhan.
“Enforcement in the tax and customs context involves thousands officials responsible for different forms of enforcement or compliance work: such as debt collection, audits, investigations, inspection of trade containers etc. of both legitimate trade and illicit trade. Risk assessment of taxpayers and traders is an essential part of enforcement – primarily because no authority in the world can audit every taxpayer or examine every container.”
Gordhan said the establishment of additional and specialised capacity was a direct result of “an acute increase” in the smuggling of abalone and cigarettes in the mid-2000s.
He said a proposal was then tabled to then Finance Minister Trevor Manuel to approve a partnership between Sars and the National Intelligence Agency to establish a unit that would deal with Customs and illicit trade matters.
“The reason for this partnership was precisely the fact that only an intelligence agency may collect covert intelligence and that this assistance and collaboration would enhance Sars’ capacity to deal with illicit trade.
“This did not materialise. However, I understand that, people were formally and legitimately hired and deployed by the relevant senior officials to perform specific tasks within the enforcement context described above.”
Gordhan said even when he became finance minister in 2009, he and his deputy (current Finance Minister) Nhlanhla Nene continued to receive operational reports and general trends from Sars managers.