/ 3 November 2018

Moyane unlikely to succeed in ConCourt challenge — Ramaphosa

Former Sars commissioner Tom Moyane.
Former Sars commissioner Tom Moyane. (Gallo)

The Constitutional Court should not hear former South African Revenue Service (Sars) commissioner Tom Moyane’s application because it would not be in the interest of justice, his prospects of success are “poor” and there is no “compelling reason” to do so.

This is according to President Cyril Ramaphosa in his answering affidavit to Moyane’s court challenge.

READ MORE: Moyane still going to the ConCourt

Moyane went directly to the highest court in the land in September where he listed Ramaphosa, Minister of Public Enterprises Pravin Gordhan, Advocate Azhar Bham and retired Judge Robert Nugent and his assistants as respondents in a 300-page application.

Chief amongst his concerns was the decision made by Ramaphosa’s to institute and continue with the concurrent disciplinary inquiry headed Bham and the Sars commission chaired by Nugent. He said it was unfair because he was essentially facing two inquiries into the same issues in two different forums.

In his founding affidavit Moyane explained his move to bypass the high court and the Supreme Court of Appeal by saying that his matter had been made “semi-urgent” because the court application raised constitutional matters that would ultimately end up in the apex court and given that his term was almost ending he wanted the opportunity to “vindicate” his rights while that was still possible. 

He added that Nugent’s “threats” at the time to recommend that he be removed from office in his interim report had also added to the urgency of the matter.

Moyane further argued that the matters he had raised in his court application had already been ventilated and ruled on by Bham and Nugent in their inquiries. Ramaphosa said Moyane’s concerns are “misplaced” and his case for semi-urgency “rings hollow”.

“Any urgency alleged by Mr Moyane is self-created in that there has been significant, yet unexplained, delays in instituting these proceedings”.

Ramaphosa questioned why Moyane waited until September 28 to make this application despite threatening to do so as early as March 19. He goes on to explain that in between those dates Moyane had multiple opportunities to challenge him in court.

Further, “the contention relied upon by Mr Moyane that direct access should be granted because his contract of employment will terminate in a year falls away in light of his removal as commissioner with immediate effect,” Ramaphosa said.

In fact, the decision to fire Moyane has changed the nature of a number of demands in his initial court challenge and made them “moot” and “nugatory” according to Ramaphosa.

Moyane was fired on Thursday when Ramaphosa accepted the recommendations made in Nugent’s interim report that he be removed urgently to prevent any further deterioration at Sars.

Moyane further asked the court to set aside the rulings that were made by Nugent and Bham in the course of their inquiries in relation to similar issues raised in his court application.

In addition to asking the court to rule as unconstitutional the decision to have both proceedings continue at the same time, Moyane had also asked for the court to declare Gordhan’s participation in both inquiries unlawful and for Professor Michael Katz to be removed as an adviser to Nugent.

“All these decisions have now been superseded by my decision to remove Moyane from the position of commissioner,” said Ramaphosa. “Moyane’s complaint about the concurrency of the inquiries falls away and his current challenge to interim rulings made falls away”.

Ramaphosa said perhaps the only issue remaining was the challenge to remove Katz as Nugent’s assistant because of the close relationship he has with Ramaphosa as his legal adviser. Ramaphosa said his complaint “lacked merit and legal validity”.

He said although he does not deny the relationship he has with Katz it could not “give rise to a reasonable perception of bias”. Ramaphosa argued that the test of bias is established on whether a reasonable, objective and informed person would on correct facts apprehend bias.

He said given that Katz was one of the leading tax minds in the country and had chaired the Katz commission which brought great reforms to the tax administration system his knowledge was necessary in analysing the destruction of Sars.

“However, on the timelines set out in the terms of reference for this commission, in all likelihood this commission would have completed its work by the time this matter is heard (and decided) by this court,” said Ramaphosa.

The Sars commission is expected to hand in its final report at the end of November and Nugent has made it clear that the commission will not miss its deadlines.

Ramaphosa also added that the constitutional court does not have exclusive jurisdiction to hear Monyane’s case which only applies if the President and Parliament fails to fulfil its constitutional obligation.

He argues that his decision to not accede to any of Moyane’s demands “do not involve a failure to fulfil a pure constitutional obligation imposed on the President”.

Ramaphosa also called into question Moyane’s leadership and behaviour as a senior public official.

He said Moyane’s affidavit was littered with gratuitous allegations levelled against him Justice Kate O’Regan and the six other respondents.

“Not only are these allegations unbecoming of a senior public official but they are argumentative, inflammatory and ultimately irrelevant to Moyane’s cause of action”.

He said while Moyane was commissioner Sars had several years of continued revenue shortfalls the biggest being the projected R50-billion shortfall in 2017 – “the largest since the 2009 recession”.

But in his court application Moyane described his tenure at Sars as “the most successful in the democratic era”.

“For example, I was the first and only commissioner of Sars in the history of the institution to reach the psychological important revenue milestone of R1-trillion and to break that hitherto elusive barrier three times in a row,” Moyane explained.

Ramaphosa was unmoved saying, if anything, Moyane’s obsession with the R1-trillion “fails to appreciate that he needed to collect well beyond R1-trillion to the higher budgeted estimate Sars was expected to collect”.

READ MORE: Former treasury official dismisses Moyane’s ‘trillion rand man’ claim to fame

He said because of this failure to collect revenue government was forced to borrow more money and increase its debt.

Government’s debt to gross domestic product (GDP) currently sits at 55% to the GDP and is expected to stabilise at 59% by 2022. This is higher than the 56% stabilisation point previously projected by the national treasury.

‘‘The weakening of the fiscal position was stated by S&P Global Ratings as one of the factors behind reducing the rating on SA’s long-term local currency rating to ‘BB+’ (commonly referred to as ‘junk’ status) on November 24 2017,” Ramaphosa said.

National treasury said deteriorating economic performance and revenue shortfalls had contributed to the slippage in fiscal projections. This year, Sars expects a R27.4-billion revenue shortfall, of which R20-billion is because of a backlog of value-added tax refunds that were not paid out during the Moyane years.

Ramaphosa said Sars is currently facing serious challenges such as declining tax morality resulting in tax evasion and avoidance by citizens and a deterioration in tax administration plus significant shortfalls which needed to be addressed as a matter of urgency.

“The resolution of the problems currently facing Sars requires the installation of effective, credible and permanent leadership and cannot be achieved while charges of serious misconduct hang over the head of the suspended commissioner of Sars, a matter which, in itself, seriously undermines public confidence in the institution,’’ Ramaphosa said.

He said if Moyane was a “responsible leader” he would have made the decision to step down once Ramaphosa intimated he had lost confidence in his ability to lead Sars.