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JOHANNESBURG — The South African Revenue Service (SARS) — which in previous years was respected for being ruthlessly efficient — is now finding itself in the awkward position of being accused of falling foul of carrying out its primary function. Last week, Treasury announced during Gigaba’s disastrous mini-budget speech that SARS had effectively failed to hit its collection target amid an astounding shortfall of R51bn. Treasury is expecting that shortfall to widen in the coming years. Days later, investigative journalist Jacques Pauw released his book ‘The President’s Keepers’, which contains several bombshell claims regarding questions over President Jacob Zuma’s tax status. Pauw writes that Zuma failed to file tax returns during his first five-year term (2009-14) and that he earned a R1m a month salary from KZN businessman Roy Moodley during the first few months of his presidency. An extract pertaining to these allegations appeared in the Sunday Times. Subsequently, SARS says it’s considering suing Pauw and the newspaper and is consulting its legal team. Earlier this week, I also sent questions to SARS asking about Zuma’s tax status – what I got back were answers about how the law viciously protects personal taxpayers’ status, regardless of who they are. (You can see my email and subsequent response from SARS at the bottome of this post.) – Gareth van Zyl
Press statement from SARS:
SARS to take criminal action against breach of confidentiality of taxpayer information
PRETORIA, Friday 3 November 2017 – SARS has noted the widespread media reports on the Sunday Times’ lead story, Gangster Republic (29 October) which is an extract from Jacques Pauw’s book, The President’s Keepers – Those keeping Zuma in power and out of prison.
SARS wishes to categorically state that it is deeply concerned about the publication of confidential taxpayer information in contravention of Chapter 6 of the Tax Administration Act (TAA) 28 of 2011, especially Section 69 which prohibits the disclosure of taxpayer information by a SARS official or former SARS official.
Further, Section 69(3) of the TAA prohibits the disclosure of confidential taxpayer information outside judicial processes and in particular an Order of the High Court.
As a result, SARS is duty-bound to address the violation of the TAA by Mr. Jacques Pauw and the unsubstantiated allegation that Commissioner Tom Moyane is aiding President Zuma to avoid his tax obligations.
The premise of the piece hinges on the predictable narrative that the organization cannot fulfil its mandate since the appointment of Commissioner Moyane because he is allegedly using his position to protect the President.
SARS views the publication of confidential taxpayer information through Mr. Pauw’s book and the Sunday Times as unlawful and a criminal offence in terms of Section 236 of the TAA.
Thus SARS is seeking legal advice on what steps to take, including but not limited to criminal and civil investigation against Mr. Pauw and the Sunday Times into the circumstances pertaining to the unlawful disclosure of confidential taxpayer information.
Furthermore, SARS is deeply concerned about the apparent bias, irresponsible and mischievous tone of the report which seeks to cast aspersions on the character of Commissioner Moyane.
The report perpetuates the unfounded narrative that he is involved in efforts to quash President Zuma’s tax liability. This narrative is untruthful, disingenuous and outrightly irresponsible.
SARS wishes to point out that the allegations pertaining to the President Zuma’s tax affairs refer to events that occurred prior to Commissioner Moyane assuming his current position. That fact alone should be more than enough to end such reckless speculation and treacherous narrative.
In addition, SARS dismisses with contempt the allegation that officials who were allegedly administering President Zuma’s tax affairs were purged from the organisation.
Another fact that proves that the book and the newspaper report are devoid of any factual substance is that all former SARS officials mentioned in the article voluntarily resigned from SARS.
It must be appreciated that, as a result of the dictates of the TAA, the Commissioner is unable to address the veracity of the allegations insofar as they relate to engagement between SARS and other parties, including the President.
SARS wishes to put it on record that the Commissioner does not interfere with a taxpayer’s assessment, audit, dispute or settlement. There are governance mechanisms and control measures in place to ensure that all divisions have the necessary independence to deal with the tax affairs of any taxpayer in a manner prescribed by the relevant tax legislation without fear, favour, prejudice and any undue interference from anybody, including the Commissioner.
We reiterate that the Commissioner, along with all former and current SARS officials, is compelled to uphold the confidentiality of any taxpayer’s information, regardless of the position or status of the taxpayer.
It must be appreciated that SARS is placed in a very difficult position when factually incorrect information is published about a taxpayer, hence its intention to take action against Mr. Pauw and the paper.
SARS cannot refute such reckless reporting by publishing the correct information, for in doing so SARS would contravene the law and also breach the relationship of trust between SARS and taxpayers.
With this in mind, SARS remains resolute, focused and single-minded about meeting our revenue collection target for South Africa, revenue which our country needs for growth and development.
Below is a copy of an email I sent to SARS’s media team on Monday October 30:
I’m a journalist working for business publication BizNews.com and I have a number of urgent questions regarding the tax status of President Jacob Zuma.
I trust that you saw the extract of a new book by investigative journalist, Jacques Pauw, being published in the Sunday Times yesterday. The book is entitled ‘The President’s Keepers’ and it has some explosive claims, particularly regarding the tax affairs of Mr Zuma. This book, in turn, is indirectly placing a spotlight on SARS, especially with the personal income tax season coming to a close shortly.
(You can read the key extract here: https://www.timeslive.
co.za/sunday-times/opinion- and-analysis/2017-10-28-glenn- agliotti-zuma-is-a-gangster- like-us)
For tomorrow morning, we are planning on publishing a story on Mr Zuma’s tax status and the questions around it, and I would appreciate if you could answer these questions.
Seeing as Mr Zuma, like any other citizen, has to by law file tax returns and pay his fair share, I trust you will respond to what I ask below. Also, in light of SARS missing its revenue collection target by R51bn, I imagine it would be critical for your organisation to make sure it collects all revenue owed to it by taxpayers, regardless of who they are. Here are my questions then:
1. What is President Jacob Zuma’s current tax status? Seeing as he is a public figure (and it’s in the public’s interest), are you able to disclose whether his personal affairs are in order or not?
2. The book says that, essentially, during the first five-year term of his presidency, Mr Zuma FAILED to submit tax returns. Can you confirm or deny please?
3. The book further says that Mr Zuma owes tax in terms of fringe benefits to his Nkandla homestead. Can you please comment? (This amount previously owed is said to be in the region of R64m. Has this been paid? If not, why not?)
4. If Mr Zuma is out of step with SARS, what is SARS doing about it?
5. These revelations could spark a massive tax revolt. After all, if the president is refusing to comply (just as every other citizen is expected to), are you, as SARS, not at risk of facing tax protests?
Gareth van Zyl / Deputy Managing Editor BizNews.com
Thank you very much for your query. Find our answer below:
We have noted the cited media report.
As you are aware, SARS does not comment on taxpayer information in the public domain. SARS is bound by the confidentiality clause, that is, Section 69, not to divulge specific information and details on the affairs of taxpayers. This is in line with the provisions of Chapter 6 of the Tax Administration Act, 2012 (Section 69 of the Act) which provides for the secrecy of taxpayer information.
Find an article on revenue shortfall for your favourable consideration. Thanks.
Attached to the email that SARS sent me the following two attachments, which I’m including here:
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