Lying tax czar ousted
Damning report finds Magashula lied to committee on several counts
OUPA Magashula quit his R4.1-million-a-year job as the head of the South African Revenue Service (SARS) on Friday after it came to light that he lied to an internal fact-finding committee appointed to probe claims of improper conduct.
Finance Minister Pravin Gordhan appointed the committee in April after City Press reported a phone conversation, facilitated by convicted drug dealer Timothy Marimuthu, in which Magashula offered a job to one of Marimuthu’s friends, chartered accountant Nosipho Mba.
When first questioned about the incident, Magashula told the committee he had not heard from Mba after that discussion and also claimed he hardly knew Marimuthu and only met him for the first time that day.
In the damning report, released on Friday, the committee described the phone conversation as “unprofessional, over-intimate and almost haughty”. Magashula claimed that he provided Mba with his private e-mail address as it was easy to remember and he did not want to wait for Mba to fetch a pen and paper to write down his work address.
But the report reveals that Magashula lied and omitted key facts to the committee, including:
The phone conversation did not take place during July-August 2010, linking it to the soccer World Cup, as Magashula initially said. It took place nearly a year later, on May 14 2011;
Magashula at first said he did not get a CV or any e-mails from Mba. But he actually received five e-mails from her in May 2011 and forwarded her CV to an official in SARS’s internal audit department. Mba was called for an interview at SARS, but cancelled because she wanted a job in Durban;
Magashula did not meet Marimuthu for the first time on the day the conversation was recorded, allegedly in a restaurant in Umhlanga Rocks after an introduction by a senior government official. In fact, he met Marimuthu in January 2010 at the house of Durban businessman Vivian Reddy. Later, Magashula told the committee that he had met Marimuthu at least four times before; and
The phone conversation was unlikely to have taken place at a restaurant in Umhlanga Rocks, as Magashula told the committee.
Marimuthu openly boasted of his influence at SARS, despite the fact that the tax authority was investigating his affairs. In September 2011, SARS sent a warning letter to Marimuthu to “stop lying about his influence at the agency”, the Sunday Times reported last year.
Marimuthu refused to be interviewed by the committee, which did not have powers to subpoena.
The committee, chaired by retired Constitutional Court judge Zak Yacoob, found that Magashula “was much less frank with the committee than the committee would have expected of a person who had the integrity essential to his position”.
It appears that certain people had tried to blackmail Magashula using the phone recording.
Gordhan said on Friday that no evidence was found that Magashula committed a crime and that he did “some extremely good work during his time at SARS”. However, SARS will now investigate whether Magashula flouted any tax and customs processes, Gordhan said.
He dismissed concerns that Magashula’s conduct may be used as evidence by critics of SARS — such as businessman Dave King and Julius Malema, who have both been fighting high-profile legal battles with the receiver — that it does not treat all taxpayers equally and uses tax investigations to settle political scores.
“We have a very long record at SARS of treating every taxpayer fairly. We have a very capable legal system in South Africa and nobody is above the courts or the constitution of this country. If there is anyone who has any evidence that tax laws are broken, they must come to us or go to the courts,” said Gordhan.
If Magashula had not resigned voluntarily following the release of the report he would have been subjected to a full disciplinary hearing, Gordhan said. “SARS is one of the key pillars of our fiscal order and our democratic dispensation. It is an institution whose very foundations are built on the trust and credibility that the South African taxpayers have in it. It is therefore critical that those to whom the stewardship of this vital fiscal institution is entrusted conduct themselves . . . in a manner that ensures they are above question,” he said.