Johannesburg - Suspended Sars commissioner Tom Moyane’s bid to halt an inquiry into tax administration and revenue collection faces bleak prospects following damning evidence that the revenue authority lost almost R50 billion in uncollected taxes under his watch.
Cecil Morden, former chief director, economic tax analysis at the National Treasury, on Friday told the commission headed by retired Judge Robert Nugent that Moyane’s tenure at Sars was allegedly characterised by poor revenue collection, especially of customs duties, since 2014.
Moyane was appointed Sars commissioner in September 2014 by then president Jacob Zuma. Morden testified that the situation became worse in 2016 and 2017, saying the revenue authority had failed to account for more than 29% of customs duties.
He said the signs of poor revenue collection began in 2014.
Morden conceded that the failure could have been a result of an increase in the smuggling of tobacco and alcohol or that the dealers were failing to pay excise duties to Sars.
In his presentation, Morden told Judge Nugent that the illicit economy was one of the major contributors to poor revenue collection. Morden’s testimony corroborated the testimony of Gene Ravele - former Sars head of customs - who told Judge Nugent that his unit - the High Risk Investigative Unit, colloquially known as the Rogue Unit - was allegedly instructed to stop inspecting factories owned by tobacco dealers. He said the instruction allegedly came from Jonas Makwakwa, formerly group executive business and individual tax.
Ravele told the commission on Thursday that the instruction allowed the smuggling of cigarettes to grow undetected and led to the increase of organised gangs in South Africa.
Morden also told the commission on Friday that during the same period Sars had failed to pay tax refunds to thousands of bona fide businesses and individual taxpayers.
“It was for these reasons that a number of taxpayers approached the tax ombudsman (retired Judge Bernard Ngoepe) to complain about the lack of payment of their tax refunds due to them,” Morden said.
In most cases, he said, when Sars under Moyane announced that it had collected more than R1trillion - these reported amounts included refunds owed to taxpayers.
Earlier, Moyane, through his counsel Advocate Dali Mpofu, asked Judge Nugent to expunge all the evidence placed before him by former Sars employees and Public Enterprises Minister Pravin Gordhan.
Mpofu said Gordhan had a personal hatred for Moyane and was also President Cyril Ramaphosa’s star witness in a disciplinary case against his client.
According to Mpofu, Ramaphosa’s disciplinary charges against his client were an abuse of state power. “It is just to glorify their own terms of office with lies and insults,” he said.
Mpofu also asked Judge Nugent to halt the proceedings, arguing that one of his “commissioners” - Professor Michael Katz - was a personal friend of Ramaphosa’s.
“They are friends. They visit each other’s houses. Professor Michael Katz also represented President Ramaphosa after the Marikana miners lodged a lawsuit against him in his personal capacity following the tragedy.
“There is an old adage: Justice must not only be done, it must be seen to be done,” Mpofu said.
He also said his client was not afforded an opportunity to testify before the commission but Judge Nugent refuted the claim.
He provided Mpofu with a list of correspondence which he had personally had with Moyane’s instructing attorney, Eric Mabuza, since June 20 - a week before the hearings began. Judgment on Moyane’s application is due to be delivered on Monday.