Sars officials offered chance to testify in 'secret'

Johannesburg - Senior South African Revenue Service (Sars) officials, who have insight into the masterminds of the alleged collapse of the revenue authority, have been offered the opportunity to testify in “secret”.
This was the guarantee given last week by Judge Robert Nugent, the chairperson of the Nugent Commission of Inquiry tasked with probing tax administration and governance at Sars during the tenure of suspended commissioner Tom Moyane, which started in September 2014.

The offer came as the commission is expected to hear testimony from Bain Consulting Agency and the National Treasury this week. Bain is to give evidence about its alleged role in restructuring Sars’ operations after Moyane came to the helm.

However, the commission has already heard that Moyane and his team allegedly rejected all Bain’s recommendations and introduced a new operating model in Sars whose “mastermind” is still a mystery to the judge and the commission.

Judge Nugent made the offer to hear “testimonies in camera” after potential witnesses expressed fear of “paying the ultimate price”.

“They were reluctant to come and testify before the commission. I’m now considering hearing some of their testimonies in camera. They have expressed to me that they were afraid of the consequences if they testify,” he said.

The judge indicated earlier in the proceedings that if they agreed to testify, their identity would be protected and the media would not be allowed to take their photographs.

Evidence leader advocate Carol Steinberg confirmed the commission’s predicament, adding that some witnesses, who made sworn affidavits to her team, did so on condition that their identities would be withheld. Owing to the serious nature of the threats, Steinberg told the commission that some of the witnesses’ sworn statements would not be uploaded on to the inquiry’s website.

Since the hearings began in June, the commission has heard incriminating evidence of how the advent of Moyane resulted in the alleged dismantling of key institutions in Sars, such as the Large Business Centre (LBC) in October 2015.

The LBC was established in 2010 to ensure big businesses in the country were tax-compliant. The centre collected more than 30% of the revenue.

Former LBC head Sunita Manik testified in June that she resigned in February 2016 after Moyane and then Sars chief operating officer Jonas Makwakwa began interfering in her work.

Moyane and Makwakwa allegedly reached a settlement deal with one of the owners of a multinational who owed millions to Sars. “They concluded the deal with one of the owners. The settlement agreement was then referred to the LBC settlement committee, which rejected the deal. The committee found that the agreement did not make any sense,” Manik said.

She testified that the LBC had robust governance systems which did not allow anyone to have contact with the network of taxpayers.

In her testimony, Manik was adamant that Moyane and Makwakwa wanted to commit “fraud” by targeting companies which had a lot “of money”.

Last week, the commission heard how enforcement units tasked to investigate international and local syndicates involved in the illicit economy, which includes dealing in drugs, abalone, cigarettes and clothing, were also dismantled. The commission heard that the new Sars operating model implemented in October 2015 nullified these units.

According to evidence before the commission, Sars officials were diverted from collecting revenue from big businesses to focusing on small businesses.

Narcizio Makwakwa, former executive head of small businesses, testified that his team was instructed to pursue more than 2.5 million small businesses allegedly defaulting on tax.

“I did not believe it. It was for that reason that I assembled a group of researchers in my team to investigate the claim. Our findings were that more than 70% of small businesses were paying tax,” he said.

Makwakwa, who is not related to Jonas Makwakwa, confirmed that less than 30% of small businesses were not tax-compliant, mostly foreign traders.

Political Bureau