Johannesburg - A clampdown by the taxman on the tobacco industry in the past months has resulted in a backlash which has seen South African Revenue Service (Sars) investigators become the target of spies, double agents, dirty tricks and the leaking of false allegations to discredit them.
Sars revealed to The Star this haze of shady dealings under which their employees are being forced to work, in response to rumours that their group executive in charge of enforcement, Johann van Loggenberg, had resigned because of corruption allegations.
Sars spokesman Adrian Lackay denied that any official had resigned and said Van Loggenberg’s unit was crucial in combating illegal practices in the tobacco industry.
“There are people who have a vested interest in creating confusion among state institutions. Sars is in no doubt that they are behind these allegations, as they have been in the past,” Lackay said.
He indicated that the accusations against their officials began in earnest since a letter was sent to the tobacco industry last November indicating the taxman would be clamping down on non-compliance in the industry, and that they were aware of all the means being used to avoid prosecution.
A second letter was sent in March and was copied to Lieutenant-General Vineshkumar Moonoo and the head of the Hawks, Lieutenant-General Anwa Dramat, giving further examples of the way the law was being broken and the spying and allegations against Sars officials.
The letters, under the project name “Honey Badger”, were sent to the Tobacco Institute of Southern Africa (Tisa) and the Fair Trade Independent Tobacco Association, which represent the majority of stakeholders in the tobacco industry in South Africa.
The letter says in 2012 the revenue service began looking into high-risk areas where compliance was not where it should be, and the tobacco industry fell into this category.
“The ongoing trade in illicit cigarettes in the country not only poses serious health risks to consumers, but results in a considerable loss of revenue to the fiscus, and creates an unfair competitive advantage for legitimate producers and manufacturers of tobacco products in the domestic economy,” the letter read.
The letter indicates there are more than 15 criminal cases that have been registered with the police, with more coming.
Lackay said that while conducting these investigations, it has become commonplace “for certain individuals with an interest in perverting the course of justice to compile dossiers, files and information which purport to uncover corruption, but are in fact a concoction of some fact and much fiction”.
“Such dossiers are then distributed to the media, certain law enforcement agencies and political players in the hope of disrupting or thwarting a Sars action,” he added.
He said Sars now had significant and credible evidence showing incidents of spying, double agents, dirty tricks, leaking of false allegations and the discrediting of officials.
“Sars is collaborating with the Directorate of Priority Crime Investigations (DPCI), the Hawks and state security. We are confident that soon many of the undesirable practices in the industry will come to light and the individuals will be held to account,” Lackay said.
The allegation against Van Loggenberg may relate to a complaint Sars received recently Lackay said, but added that the complainant has not yet supplied Sars with all the facts.
Hawks spokesman Paul Ramaloko said that a case involving Van Loggenberg was not being investigated by them.
Lackay said the attacks and allegations against their officials intensify when enforcement actions are having an effect on the unacceptable tax and custom practices in the tobacco industry. Initial analysis shows a 25 percent increase in excise and VAT payments Lackay said.
Tisa chairman Francois van der Merwe welcomed the audits and scrutiny. “Illicit trade is our biggest enemy.”