Tes­ti­mony in Sars case can be in ‘se­cret’

Weekend Argus (Sunday Edition) - - POLITICS - BALD­WIN NDABA

SE­NIOR SA Rev­enue Ser­vices’ (Sars) of­fi­cials who have in­sight into the masterminds of the al­leged col­lapse of the rev­enue author­ity have been of­fered the op­por­tu­nity to give tes­ti­mony in “se­cret”.

This was the guar­an­tee given last week by Judge Robert Nugent, chair­per­son of the com­mis­sion of in­quiry tasked to probe tax ad­min­is­tra­tion and gover­nance in Sars dur­ing the ten­ure of sus­pended com­mis­sioner Tom Moy­ane since Septem­ber 2014.

The of­fer came as the com­mis­sion is ex­pected to hear tes­ti­mony from Bain Con­sult­ing Agency and the Na­tional Trea­sury this week.

Bain is ex­pected to give ev­i­dence about its al­leged role in re­struc­tur­ing the op­er­a­tions of Sars af­ter Moy­ane took over.

How­ever, the com­mis­sion had al­ready heard that Moy­ane and his team had al­legedly re­jected all Bain’s rec­om­men­da­tions and in­tro­duced a new op­er­at­ing model in Sars – “whose master­mind” still re­mains a mys­tery to the judge and the com­mis­sion.

Judge Nugent made the of­fer to hear other “tes­ti­monies in cam­era” af­ter po­ten­tial wit­nesses ex­pressed fear of “pay­ing the ul­ti­mate price”.

“I had dis­cus­sions with some of them. They were re­luc­tant to come and tes­tify be­fore the com­mis­sion. I am now con­sid­er­ing hear­ing some of their tes­ti­monies in cam­era.

“They have ex­pressed to me that they were afraid of the con­se­quences if they tes­tify,” Judge Nugent said.

He had al­ready in­di­cated dur­ing the ear­lier pro­ceed­ings that if they agreed to tes­tify, their identity would be pro­tected and the me­dia would not be al­lowed to take their pho­to­graphs.

Ev­i­dence leader ad­vo­cate Caro­line Stein­berg con­firmed the com­mis­sion’s predica­ment and said some of the wit­nesses – who made sworn af­fi­davits to her team – made them un­der the strict con­di­tion that their iden­ti­ties be with­held. Due to the se­ri­ous na­ture of the threats, Stein­berg told the com­mis­sion some of the state­ments would not be loaded onto the in­quiry’s web­site.

Since the hear­ings be­gan in June, the com­mis­sion heard in­crim­i­nat­ing ev­i­dence of how the ad­vent of Moy­ane re­sulted in the al­leged dis­man­tling of key in­sti­tu­tions in Sars such as the Large Busi­ness Cen­tre in Oc­to­ber 2015.

The cen­tre was estab­lished in 2010 to en­sure big cor­po­rates do­ing busi­ness in the coun­try were tax com­pli­ant and the cen­tre col­lected more than 30% of the rev­enue.

For­mer cen­tre head Sunita Manik tes­ti­fied that she re­signed in Fe­bru­ary 2016 af­ter Moy­ane and then Sars chief op­er­at­ing of­fi­cer Jonas Mak­wakwa be­gan in­ter­fer­ing in her job.

Moy­ane and Mak­wakwa al­legedly made a deal with one of the own­ers of a multi­na­tional com­pany who owed mil­lions of rand to Sars.

“They con­cluded the deal with one of the own­ers. The set­tle­ment agree­ment was then re­ferred to the LBC set­tle­ment com­mit­tee which re­jected the deal. The com­mit­tee found that the agree­ment did not make any sense,” Manik said.

She tes­ti­fied that the cen­tre had ro­bust gover­nance sys­tems which did not al­low any­one from hav­ing con­tact with its high net­work of tax­pay­ers and their re­funds.

In her tes­ti­mony, Manik was adamant that Moy­ane and Mak­wakwa wanted to com­mit “fraud” by tar­get­ing com­pa­nies which had a lot “of money”.

The com­mis­sion heard how en­force­ment units tasked to in­ves­ti­gate in­ter­na­tional and lo­cal syn­di­cates deal­ing in il­licit econ­omy, drugs, abalone, cig­a­rettes and cloth­ing were also dis­man­tled.

‘They have ex­pressed to me that they were afraid of the con­se­quences if they tes­tify’

The com­mis­sion heard that the new Sars op­er­at­ing model which was put in place in Oc­to­ber 2015 nul­li­fied the ex­is­tence of these units.

Ac­cord­ing to ev­i­dence be­fore the com­mis­sion, Sars of­fi­cials were di­verted from col­lect­ing rev­enue from big busi­nesses and to in­stead fo­cus on small busi­nesses.

Tes­ti­fy­ing, Nar­cizio Mak­wakwa – for­mer ex­ec­u­tive head of small busi­nesses – told the com­mis­sion that his team was told to pur­sue more than 2.5 mil­lion small busi­nesses that were al­legedly de­fault­ing on tax.

“I did not be­lieve it. It was for that rea­son I as­sem­bled a group of re­searchers in my team to in­ves­ti­gate the claim. Our find­ings were that more than 70% of small busi­nesses were pay­ing tax,” he said.

Mak­wakwa – not re­lated to Jonas Mak­wakwa – con­firmed that less than 30% of small busi­nesses were not tax com­pli­ant but said the ma­jor­ity were “for­eign traders”.

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