“I can confirm that the president has informed Mr Tom Moyane of his suspension with immediate effect,” President Cyril Ramaphosa’s spokesperson Khusela Diko told News24.
“This is pending the institution of disciplinary proceedings against him.”
Details of the disciplinary proceedings are not available yet.
“What the president did say though, and he will issue a statement shortly, is that he did say that he believes it is in the public interest that we restore the credibility of SARS without delay,” Diko said.
President Cyril Ramaphosa has cited among his reasons the “deterioration in public confidence in the SARS and public finances being compromised” due to the ongoing controversy at the tax agency.
A statement released by the Presidency on Monday night said Ramaphosa told Moyane in a letter: “Developments at the SARS under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen.”
Diko said concern was raised in particular about the manner in which Moyane handled the matter of Jonas Makwakwa, who resigned last week, “his treatment of the report given to him by the Financial Intelligence Centre, and his failure to immediately report this to the Minister of Finance”.
Ramaphosa also raised the issue of management of value-added tax (VAT) refunds, which had brought the SARS into “serious disrepute” and potentially jeopardised the integrity of the SARS as collector of revenue and adversely affected tax morality among tax payers.
The decision to suspend Mr Moyane follows a meeting in which Ramaphosa informed Moyane that he had lost confidence in his ability to lead SARS and offered him an opportunity to resign with immediate effect, which Moyane declined.
Earlier on Monday, Business Day had reported that Moyane had refused to resign after he was asked to do so by Ramaphosa.
Pressure has been mounting for Moyane to quit as head of the revenue service. A R48-billion hole in revenue collection, his leadership and handling of the allegations against his second-in-charge, Jonas Makwakwa are some of the reasons cited for him to step down.
Makwakwa had come under scrutiny last week following the publication of a Daily Maverick report illustrating how New Integrated Credit Solutions (NICS) which has a deal with SARS to assist in bolstering the tax body’s debt collections, paid R600 000 into Makwakwa’s personal bank account.
On Tuesday last week, Moyane told Parliament’s standing committee on finance that while businessman Patrick Monyeki was his friend, he was not aware that the businessman was doing any direct business with SARS through the revenue service’s debt solutions provider NICS.
NICS paid Mahube Payment Solutions, a company linked to Monyeki, according to a Financial Intelligence Centre report.
The company is also alleged to have been part of “suspicious transactions” involving these businesses and Makwakwa’s bank account.
Moyane also faced questions from media and civil society groups for his role in handling millions of rands in VAT refunds to a Gupta-linked company via a third party.
On Friday afternoon, the revenue service released a statement arguing that Moyane’s actions had been consistent with the law, and the refund was above board.
SARS argued that Moyane did not decide whether the payments should be made or not, also denying that Moyane had ever instructed any SARS employee to deal with the Oakbay complaint in one way or another.
On Monday, SARS issued a statement claiming Moyane was being vilified by the media in what it called an “ongoing media onslaught”. The tax agency called on Ramaphosa to fast track the establishment of a commission into its leadership in response to this. Ramaphosa had announced a commission of inquiry into SARS leadership during his State of the Nation Address (Sona) in mid-February.
Ramaphosa indicated that as SARS Commissioner, Moyane holds a high position of trust in the management of the country’s public finances, and necessary to act “urgently and immediately”.
Finance minister Nhlanhla Nene will announce the appointment of an acting commissioner for SARS.
This is a developing story and will be updated as more details emerge.