Cape Town- 180515- The Minister of Public Enterprises, Mr Pravin Gordhan. FILE PHOTO: Siphephile Sibanyoni/ African News Agency (ANA)
JOHANNESBURG -  Suspended SA Revenue Service (Sars) Commissioner Tom Moyane is a serial lawbreaker, his conduct unlawful and his continued presence at the helm of the taxman threatens tax morality and could damage the key institution’s credibility.

This is according to an explosive affidavit by Public Enterprises Minister Pravin Gordhan, which has finally revealed President Cyril Ramaphosa’s case against Moyane.

The affidavit was filed on Wednesday after Ramaphosa missed last Friday’s deadline to reveal details of the case against Moyane before his disciplinary inquiry chaired by senior counsel Azhar Bham.

Ramaphosa suspended Moyane in March after informing him that he had lost confidence in his ability to lead Sars and offered him an opportunity to resign with immediate effect. 

Moyane,who declined Ramaphosa's offer, was replaced by the group executive responsible for relationship management within business and individual taxes Mark Kingon as acting commissioner.

Last month, Ramaphosa later established a commission of inquiry headed by retired Supreme Court of Appeal Judge Robert Nugent to focus on tax administrative issues like value added tax refunds and shortfalls in revenue in the past two financial years.

Suspended South African Revenue Services Commissioner Tom Moyane File picture: ANA Reporter
Gordhan’s affidavit shows that Moyane faces four charges including failure to act against his former second-in-command Jonas Makwakwa, who was Sars’ chief officer for business and individual tax, and junior consultant Kelly Ann Elskie following a confidential Financial Intelligence Centre (FIC) report into suspicious and unusual cash deposits into their bank accounts.

According to Gordhan, who was finance minister until March 2017 and responsible for Sars, Moyane failed to timeously ensure that Sars immediately conducted investigations to report Makwakwa and Elskie to the police and the Hawks to determine whether they were guilty of corruption and money laundering.

” … Moyane, as Sars commissioner, was required to ensure that the following steps were taken timeously in response to the FIC report … Sars immediately conduct investigations to determine whether Makwakwa and Elskie were guilty of tax evasion, the commission of tax offences under the Tax Administration Act, the contravention of internal Sars policies and/or the Public Finance Management Act (PFMA),” reads Gordhan’s 69-page affidavit.

Gordhan said Moyane failed to brief him about on the FIC report despite him (Gordhan) being the executive authority responsible for Sars and only issued Makwakwa, who was in charge of the taxman’s biggest revenue streams, and Elskie with notices to suspend four months after receiving the report and following media reports.

”The allegations made in the FIC report were extremely serious with the potential, if not handled correctly, to damage the credibility of Sars, tax morality and the collection of tax revenue,” Gordhan said.

The affidavit also states that Moyane acted unlawfully by disclosing the contents of the report to Makwakwa and Elskie without obtaining permission from former FIC director Murray Michell as this is prohibited by the FIC Act.

”Furthermore, the FIC Act prohibits the disclosure of suspicious and unusual transactions to persons implicated in such transactions,” explained Gordhan.

He said Moyane’s unlawful disclosure constituted an offence in terms of the FIC Act and brought Sars into disrepute as far as both the FIC and the public were concerned.

Moyane is also accused of accepting “without demur” investigations by law firm Hogan Lovells and assurance, advisory and tax services multinational PwC that were patently inadequate.

Gordhan’s affidavit states that Sars failed to provide PwC with the information and documentation it required to conduct effective probe.

”In doing so it effectively sabotaged the investigation. In the result the PwC investigation was largely meaningless and its findings inconclusive,” said Gordhan.

After the Hogan Lovells and PwC investigations, Moyane lifted Makwakwa’s suspension, an act which Gordhan believes was irrational and a gross dereliction of duty. 

Makwakwa quit in March this year.

Other charges include Moyane’s unilateral decision to increase salaries and implement bonus payments to senior executives without Gordhan’s approval.

Gordhan reported the matter to Auditor-General Kimi Makwetu arguing they were in contravention of the Sars Act.

Makwetu found that the senior managers’ salary increases and bonus payments were not in contravention of the Sars Act but could resulting irregular expenditure. 

Sars claimed Makwetu’s findings were a fundamental error of law and threatened legal action ignoring two legal opinions obtained by the taxman. 

Moyane is also facing charges of misleading Parliament when responding to questions from the DA and concealing the true state of events.

He is accused of violating Sars’ code of conduct by committing gross misconduct.  Moyane claimed he played no role in appointing eight debt collectors for 18 months in a deal worth over R341-million. 

One of the companies that got a share of the debt collection contract was New Integrated Credit Solutions, which is owned by Moyane’s friend Patrick Monyeki.

Gordhan said Moyane concealed his role in approving the appointment of his friend’s company. 

He will also face charges of instructing a Sars anti-corruption and security division to feign illness in order to avoid being interviewed for a probe into its high risk investigation unit. 

Moyane has two weeks to respond to Gordhan’s affidavit.