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Right of Reply: Judge Davis says national tax committee ‘does not play dice’ with system

The South African Constitutional Property Rights Foundation (SACPRIF) has clashed with Judge Dennis Davis four times and found him disingenuous and or untrustworthy, wrote Peter Meakin earlier this month. In the latest clash, the organisation is questioning whether Judge Dennis Davis should head a probe over the governance of the South African Revenue Service. SACPRIF disagrees with Judge Davis’s reading of its figures, it has said. Judge Davis has subsequently pointed out to BizNews that he is being defamed by Meakin, who is Chairman of the SACPRIF Management Committee. Meakin is co-author with Prof Nicolaus Tideman of “Land tax versus Income tax” a paper read at the November 2014 UCT Conference Income Tax in South Africa: The First 100 years and published by JUTA in in 2016. Prof Tideman heads up the Economics Department at the University of Virginia. Instead of getting personal, Meakin should do his homework properly and get his facts straight, is the message from Judge Davis. BizNews publishes Judge Davis’s response here as part of its policy to afford all parties the right of reply. – Jackie Cameron

Judge Davis responds to Peter Meakin’s article on National Tax Inquiry role

Dear Mr Hogg

My attention has been drawn to an article by one Peter Meakin concerning my role on the national tax inquiry. I am somewhat surprised that you permitted an article to be published which is so blatantly defamatory of me. Referring to a person as untrustworthy is surely prima facie defamatory as are a number of other remarks contained therein.

Judge Dennis Davis

For example the land tax report of the Katz Commission was approved by the whole committee  including this country‘s greatest economist Dr Graaf and was hardly a work of my own. Secondly that Mr Cecil Morden, a senior member of Treasury reported on the manifest inadequacies of the Meakin land tax proposals, is hardly my fault save for this: Mr Morden is a serious economist as opposed to an energetic layperson  and hence his views require sustained attention. Thirdly our committee is constituted to give advice – Treasury makes fiscal policy so Mr Meakin’s focus should be to persuade them.

Finally Mr Meakin has totally misrepresented our brief exchange at Parliament. I told him in reply to his demand that we embrace his land tax proposal that to date our analysis does not justify his idea that a land tax (in addition to rates and transfer duty ) can produce his claimed revenue. However I also informed him that we were still busy with this issue an had not come to finality and if necessary would consult further.

A national tax committee does not play dice with the tax  system – it requires sustained analysis and research before it makes concrete recommendations. Finally it is truly unhelpful for Mr Meakin to resort to defamation when he is welcome when we have done more preliminary work and further analysis of Treasury’s work on the subject to make further submissions and show us exactly how the revenue he claims can be realized. An econometric model would be a good start.  

Sincerely

Dennis Davis

PS: Our country deserves to conduct a rigorous debate about tax; regrettably your BizNews appears to be willing to allow any form of inaccurate ad hominem attack to pass.

Judge Davis sets record straight on role of tax inquiry

By Liesl Peyper

Cape Town – Judge Dennis Davis said his committee’s role is not to investigate the closure of certain units within the South African Revenue Service that were shut down since Tom Moyane took over as Commissioner of the organisation. 

Davis, who heads up the Davis Tax Commission since its inception in 2013, was speaking to Bruce Whitfield on 702’s Money Show in early December.

In the interview, he set the record straight about the committee’s mandate for an inquiry into Sars governance and operating model. 

Whitfield asked Davis if the Tax Committee was considering the closure of certain units within Sars – “the sort of enforcement units that were doing lots of checks and balances”. 

Closure of tax units 

Davis responded: “No, we’re not doing that at all. I don’t (know) where that came from. Mr Moyane came to us last year still and told us: ‘This is our operating model. This is how it works.’”

“And we (as a committee) thought we’d better look into the operating model to see whether in fact it could bear the weight of what we think should be the ideal tax system for South Africa going forward.” 

Davis said if the investigation shows that certain units are closed and others are opened, the committee will try and find out if those decisions promote tax collection from a “legitimacy and an efficiency point of view”. 

The judge was also critical of media reports suggesting that he said the relationship between Finance Minister Pravin Gordhan and tax boss Tom Moyane is “not good”. 

‘I’m not investigating relationships’

Pravin Gordhan

He said the Finance Minister asked him “a long time ago” to look at the question of whether there should be a congruence between tax policy on the one hand and tax administration on the other.

“Or to put it more specifically, did the recommendations of the Katz Commission, which some of us were on, and basically gave rise to an independent Sars, hold up in the year 2016 and if so is Sars’ model at present congruent with those particular recommendations.” 

Davis emphasised that he would be looking at issues relating to taxpayer’s rights on the one hand and illicit flows.

“That includes the stuff that came out of the Panama papers. Is the operating model at Sars good enough to deal with that; and what about base erosion and profit shifting. We’ve generated a thousand papers – if not more – of recommendations and we’re looking at whether Sars can implement those and the same goes for high net-worth individuals. 

“These are issues that have been there for months and I don’t really understand where all these (media) reports are coming from. To be honest, the issues that have been in the newspapers – that’s not my job. And in fact, I wish they’d leave us alone on that.”

Davis reiterated that he and the Tax Committee are tasked with developing recommendations.

“We want to help make Sars the best possible tax collector. 

“But if for example the Minister and the Commissioner want x, y and z investigated that’s a different matter entirely. It’s not my job.” 

Source: Fin24

http://www.fin24.com/Economy/judge-dennis-davis-sets-record-straight-on-role-of-tax-inquiry-20161202

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