Johannesburg - The SA Revenue Service’s (Sars) inspection of cigarette companies was abruptly halted by former Sars executive Jonas Makwakwa, the Nugent inquiry heard.
This was the testimony of former Sars employee Gene Ravele who said that the decision to halt these crucial inspections was the breeding ground for non-compliance with excise taxes.
This decision led to a reduction in tax collections, Ravele said.
Ravele, who was in charge of compliance at Sars, was testifying on the third day of the commission of inquiry into tax administration. The inquiry is chaired by Judge Robert Nugent.
“After I left, there was no inspections at cigarette factories. Until today. When the minister of finance complains of the lack of compliance, it was planned,” said Ravele.
He also used the testimony to dispel rumours about the High Risk Investigative Unit, which was known as the “rogue unit”.
The unit was disbanded after suspended Sars commissioner Tom Moyane was appointed in 2014.
Ravele said the unit was crucial to Sars operations as it helped bust a number of criminal activities.
“That unit helped us bust a crystal meth lab in Durban. Moyane called us to an extended meeting. He asked about the rogue unit. Moyane said “no rogue unit will be on my watch”.
“We started getting calls that we are running brothels. It was a sorry time. He disbanded exco. He rescinded exco a month later. There were new faces and Jonas Makwaka was part of exco,” said Ravele.
Ravele was eventually put on suspension in 2015 based on reports on the rogue unit. He later left the agency which he joined in 1998.
The former head of group legal services, Makungu Mthebule, testified to the extent of Moyane’s right hand-man Jonas Makwakwa’s interference in her work.
Mthebule said Makwakwa would constantly ask her about the status of certain taxpayers.
“Makwakwa would SMS me and say he was with this high-level tax payers, where are we with this tax payer. This was wrong,” she said.
Makwakwa was eventually placed as the head of the VIP tax unit during the controversial restructuring at Sars.
Moyane was accused of shielding Makwakwa, who resigned in March following reports that he had appointed a Sars contractor which he had been linked to.
On Wednesday former staffers spoke of how they were shifted from their positions without any given explanation as soon as Moyane was appointed.
They also testified about the environment of mistrust that plagued staffers as numerous cameras were installed around the building.
The inquiry continues.