Sars Deputy Commissioner Ivan Pillay.
Research project Afrobarometer recently found significantly lower levels of perceived corruption in the South African Revenue Service (Sars) than the continental average for tax offices. Business executives surveyed by the latest Global Competitiveness Report gave the service an almost clean bill of health – 5.4 on a 7-point scale – on the prevalence of bribes and irregular payments to officials.
Such is Sars’s local and global standing. But for how much longer? How long before it goes the same way as South Africa’s crippled and tainted National Prosecuting Authority (NPA)? There are ominous signs that the service has become the latest administratively independent state institution to face a political assault intended to bring it to heel. Tom Moyane’s arrival as tax commissioner was almost immediately followed by a wave of suspensions, resignations and disciplinary charges against its top managers, including deputy commissioner and former anti-apartheid struggle stalwart Ivan Pillay.
One indication that ulterior motives lie behind the apparent purge is the unseemly haste and muddle surrounding the disciplinary crackdown. Another is the dubious charges: one manager has been carpeted, according to reports, for failing to provide Moyane with an official car on time.
Before the case came to court, the suspension of the Sars executive for strategic planning and risk, Peter Richer, was withdrawn. Later, in a resounding slap in the face for the current Sars leadership, Pillay – who argued that he had not been allowed to respond to the allegations against him when he was abruptly shown the door – was reinstated.
An enormous hoo-ha has been made about the responsibility of Pillay and those loyal to him, including investigations head Johann van Loggerenberg, for a “rogue” unit that allegedly overreached itself by spying on President Jacob Zuma, among other charges.
The hue and cry is far from convincing. The Sikhakhane committee, set up to probe Van Loggerenberg’s conduct, credibly argues that he has a case to answer over his alleged affair with a female lawyer whose clients were under Sars’s scrutiny. But its findings on the unit – which was apparently launched with the knowledge and support of former commissioner Pravin Gordhan – are vague and poorly substantiated, both in fact and in law.
The fact is that spook stories about the unit have been repeatedly recycled, and dealt with by Sars, over four years, starting with the self-interested claims by an official facing rhino-poaching charges that it targeted Zuma, Julius Malema and other (then) members of Zuma’s circle.
What party political, corporate or personal advantage might lie behind their strategic resurrection? Perhaps there is a confluence of all three.
Last week the Mail & Guardian reported on the alleged entanglement of Pillay in negotiations about the importation of campaign T-shirts on behalf of the ruling party just before the election; it involved a Taiwanese-South African businessperson – who happens to have the same lawyer as the president – facing a R500-million tax probe. It is also said the ANC was incensed by the tax deal reached with Malema, now Zuma’s parliamentary tormentor, particularly given the weakness of the criminal case against the Economic Freedom Fighters leader and the likelihood that he will wriggle off that hook.
But there may be more significant drivers. Pillay has reportedly warned Zuma that the improvements on his Nkandla homestead are a fringe benefit with tax implications, and that he should regularise the tax affairs of his family’s various trusts and foundations.
As we saw from the disgraceful attacks on the public protector following her report on Nkandla, the ANC and its representatives in government do not feel bound to uphold the independence of any official institution – even if interference weakens it and undermines its credibility.
Governance at SAA has been compromised by systematic moves to protect its board chairperson, Dudu Myeni, a close Zuma associate – climaxing in the wholesale transfer of the airline from the public enterprises ministry to the treasury, which is safely under Zuma’s thumb. There has been similar interference in the upheavals at PetroSA, including an attempt by one of Zuma’s most trusted agents, Tina Joemat-Pettersson, to install an alleged fraudster as a board member.
The M&G recently reported that the Industrial Development Corporation, a parastatal with a development mandate, appeared to have taken a hefty risk by handing a sweetheart debt repayment deal to the politically connected Gupta family.
The NPA has been reduced to a basket case by repeated bouts of political meddling and intrigue. Former top officials Nomgcobo Jiba and Lawrence Mrwebi reportedly face charges – apparently linked to the dropping of charges against former crime intelligence boss Richard Mdluli. And current NPA head Mxolisi Nxasana has been threatened with an inquiry into his fitness to hold office.
Apart from self-interest, the underlying ideological justification is that the ANC is the revolutionary vanguard of the people and that the entire state apparatus must submit to it. Hence the tendency to treat public servants who stand their ground in the teeth of pressure as enemies of transformation.
The dangers with the taming of Sars are obvious: tax investigations can be used as a weapon against political enemies.
Just as important, perhaps, is the status of the revenue service. Perceptions that it has fallen prey to factional interests can only undermine tax morality at a time when the government needs every cent it can get.
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.