Suspended SA Revenue Service (Sars) commissioner Tom Moyane’s bid to halt an inquiry into tax administration and revenue collection faces a bleak prospect of success following damning evidence that the revenue authority lost almost R50billion in uncollected taxes on his watch.
Cecil Morden, the former chief director of economic tax analysis at the National Treasury, told the commission, headed by retired Judge Robert Nugent, yesterday that Moyane’s tenure at Sars was characterised by poor revenue collection, particularly custom duties, since 2014.
Moyane was appointed Sars commissioner in September 2014 by former president Jacob Zuma.
Morden testified that the signs of poor revenue collection had started in 2014 and by 2016 and 2017, Sars had failed to account for more than 29% of custom duties.
He conceded that the failure could have been caused by an increase in the smuggling of tobacco and alcohol, or that dealers were failing to pay excise duties.
Morden said the "illicit economy" was a major contributor to poor revenue collection.
His 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, had allegedly been instructed to stop inspecting factories owned by tobacco dealers.
He said the instruction had allegedly come from Jonas Makwakwa, formerly group executive of 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 further told the commission 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 to complain about the lack of payment of their tax refunds," Morden said.
He said in most cases 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 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 held 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", Michael Katz, was a personal friend of Ramaphosa's.
"They are friends. They visit each others’ houses. Michael Katz also represented President Ramaphosa after the Marikana miners lodged a lawsuit against him in his personal capacity.
"There is an old adage: justice must not only be done, it must be seen to be done," Mpofu said.
He said his client had not been afforded an opportunity to testify before the commission, but Judge Nugent rejected the claim.
The judge provided Mpofu with a list of correspondence which he personally undertook with Moyane’s instructing attorney, Eric Mabuza, since June 20, a week before the hearings began.
Judgment on Moyane’s application is expected to be delivered on Monday.