Ramaphosa intervenes to suspend SARS boss

SARS Commissioner and known Jacob Zuma loyalist, Tom Moyane, was suspended by President Cyril Ramaphosa with immediate effect last night. The suspension, notes Legalbrief, followed an earlier request – rejected by Moyane – by Ramaphosa for his resignation. The defiant commissioner also reportedly threatened court action as he sought to keep his job. The suspension ‘is pending the institution of disciplinary proceedings against him’, Ramaphosa's spokesperson Khusela Diko reportedly told News24. Details of the disciplinary are not available yet. ‘What the President did say, though, and he will issue a statement shortly, is that ... he believes it is in the public interest that we restore the credibility of SARS without delay,’ she said. A statement released by the Presidency last night said Ramaphosa told Moyane in a letter: ‘Developments at the SARS under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen.’ Diko said concern was raised in particular about the manner in which Moyane handled the matter of Jonas Makwakwa, who resigned last week, ‘his treatment of the report given to him by the Financial Intelligence Centre, and his failure to immediately report this to the Minister of Finance’. Diko said another concern Ramaphosa raised was the management of VAT refunds, which had brought the SARS into ‘serious disrepute’ and potentially jeopardised the integrity of the SARS as collector of revenue and adversely affected tax morality among tax payers.

Moyane’s handling of the Makwakwa saga had put him on a collision course with Parliament’s Standing Committee on Finance, says a Business Day report. Last week, Moyane had to defend himself when further details emerged regarding an alleged R70m VAT refund to the controversial Gupta family. This came when Moyane was already in a precarious position following the announcement of a tax revenue shortfall of R48.2bn – an increase over last year’s figure of R30.7bn. While three sources reportedly told Business Day Moyane was approaching the courts to block his removal from office, the Presidency said it would not confirm or deny any reports concerning Moyane. Moyane’s suspension comes on the cusp of an announcement by Moody’s on Friday on whether SA’s investment status will be downgraded. Moyane last week announced the resignation of Makwakwa, after shielding him for more than a year. Moyane was presented with a Financial Intelligence Centre report on suspicious and unusual transactions in Makwakwa’s personal bank accounts and that of his partner Kelly-Anne Elskie in May 2016. After an investigation by international law firm Hogan Lovells that took about a year, Makwakwa was cleared of all charges and returned to work after being suspended for more than a year in December. Makwakwa resigned last week after it was revealed that one of the companies channelling money into his personal bank account had been appointed as a debt collector by SARS.

Moyane battled hard to cling to his job last night, according to a Daily Maverick report. It says Moyane even went as far as to threaten Ramaphosa with an interdict. His ‘deadline’ to the President was 9.30 last night. At 10pm the Presidency issued the statement that Moyane had been suspended. Mark Kingon, who replaces Moyane in the interim, is currently Acting Chief Officer: Business and Individual Taxes with SARS – the man who also replaced Makwakwa late last week. Media reports are speculating that former Deputy Finance Minister Mcebisi Jonas will act as the SARS head until a permanent appointment is made.

SARS has blamed the media for Moyane's problems. In a statement yesterday it said it was ’deeply concerned and disturbed’ at what was an ongoing media onslaught, especially against Moyane. According to a report in The Citizen, SARS said that the ‘unrelenting media attack’ was threatening to undermine the integrity of the organisation, and was skewed to project a misleading and unsubstantiated tone that is aimed at denting the reputation of the organisation. This comes as the Daily Maverick’s investigative unit Scorpio last week reported Moyane was wrong in authorising a R70m VAT refund to a Gupta-linked company through a third party. The publication said that the refund was paid to Oakbay Resources against the advice of SARS officials and applicable legislation. SARS said there was ample proof that Moyane had no role in the payment and had acted within the law. The revenue service also re-iterated that it welcomed Ramaphosa’s announcement to establish a commission of inquiry into tax administration and governance of SARS.