Sars unit was lawful – Gordhan

Gordhan said the law had always vested Sars with wide powers to investigate tax matters, including crimes that had tax implications. (Oupa Nkosi, M&G)

Gordhan said the law had always vested Sars with wide powers to investigate tax matters, including crimes that had tax implications. (Oupa Nkosi, M&G)

On Thursday the Constitutional Court ordered that the treasury, headed by Finance Minister Pravin Gordhan, must determine how much money President Jacob Zuma should repay on the nonessential upgrades to his Nkandla home.

The previous day, Gordhan had asserted that the so-called “rogue unit” in the South African Revenue Service (Sars) was established legally and functioned within the law.

A few days before Gordhan’s budget speech in February, he was presented with 27 questions from the Hawks pertaining to the unit, which was established in 2007 during his tenure as tax commissioner.

The unit was accused of engaging in illegal activities, such as spying on prominent businesspeople and politicians, including President Jacob Zuma, and running a brothel.

Gordhan said on Wednesday that the unit was an essential part of Sars’s enforcement strategy. It was established lawfully and, as far as he was aware, performed its functions in terms of the law.

Gordhan said the law had always vested Sars with wide powers to investigate tax matters, including crimes that had tax implications.

His legal team had also advised him that the Sikhakhane panel – an inquiry into Sars’s former head of investigations, Johann van Loggerenberg – was mistaken in concluding that the establishment of the unit had contravened section 3 of the National Strategic Intelligence Act. Gordhan said the unit and its activities were not subject to this provision.

He said the Hawks had no reason to investigate him and had declined to answer his questions that sought clarity as to what offence they were investigating and on whose authority they were acting.

The minister said he had been advised that he was not legally obliged to respond to the questions, but believed it was in the public interest to provide the Hawks with the information he had at hand. Being a law-abiding citizen, Gordhan said, he had decided to co-operate fully.

 
Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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