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Public protector may not subpoena Zuma’s tax records, says high court

In another court defeat for public protector Busisiwe Mkhwebane, the high court declared on Monday that the South African Revenue Service (Sars) is entitled to refuse to hand over taxpayers’ confidential information to the public protector. 

In a blistering judgment, Pretoria high court Judge Peter Mabuse also said that Mkhwebane had been dishonest, and had acted in bad faith and “improperly in flagrant disobedience of the Constitution” in her battle with Sars about accessing former president Jacob Zuma’s tax  records.

The face-off between the public protector and Sars arose after Mkhwebane subpoenaed Zuma’s tax records in October last year in her investigation into an allegation that he had — in the early months of his presidency — been on the payroll of the company Royal Security.

It emerged during the litigation that this was not the first time Mkhwebane had sought to use her powers of compulsion to obtain Zuma’s tax records.

In 2018, a similar subpoena was issued. When Sars protested that, under the Tax Administration Act, taxpayer information is highly confidential, the public protector and Sars jointly approached counsel for a legal opinion, with Sars paying because Mkhwebane said her office was short of funds. 

The opinion the parties obtained from Hamilton Maenetje SC said that the public protector could not subpoena the information. Instead, she could approach court for an order or obtain the consent of the taxpayer.

Unhappy with this opinion, Mkhwebane sought a second one — from Muzi Sikhakhane SC — but did not disclose this to Sars until this court case was launched

‘Reckless litigation’

Mabuse took a dim view of these steps by the public protector: “Now all of a sudden she has funds to secure the second senior counsel’s opinion. She was mala fide. She failed to uphold the Constitution. She was prepared to litigate recklessly. She acted improperly, in flagrant disobedience of the Constitution and the law.”

He also said Mkwebhane had already made up her mind and “did not genuinely take part in the process that led to the opinion of Adv Maenetje SC and Adv [Nick] Ferreira …. She was not honest.”

Mabuse said the legal issue before him was a simple one. Under the Public Protector Act, someone can refuse to hand over information sought by the public protector — if there is “just cause” to do so. 

If someone were prevented by law — as Sars officials are, under the Tax Administration Act — from disclosing the information, this constituted just cause, he said.

Mabuse rejected the argument that the public protector’s power of subpoena was granted by the Constitution. The subpoena power came from national legislation, he said. National legislation also required that taxpayer information be kept confidential. The two could be read together as Maenetje’s opinion stated. 

“The public protector is required to act in accordance with the law. Her powers of subpoena, which emanate from the PPA [Public Protector Act] and not from the Constitution, are accordingly subject to the law. They, therefore, do not trump the provisions of section 69(1) of the TAA [Tax Administration Act],” he said.

The judge also ordered that Mkhwebane pay 15% of Sars’s legal costs from her own pocket because, he said, she had acted and litigated in bad faith.

Read the judgment below:

Commissioner of SARS v Public Protector & Others 8407-19.PDF by Mail and Guardian on Scribd

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Franny Rabkin
Franny Rabkin
Franny is the legal reporter at the Mail & Guardian

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