Parliament may approach courts over Makwakwa’s tax probe

Parliament’s standing committee on finance may approach a high court to see whether it could compel South African Revenue Services (Sars) commissioner Tom Moyane to answer questions about an investigation into the tax affairs of one of its senior executives, it emerged on Tuesday

“Instead of going around in circles, can we now ask you, Frank, to deal with this matter and check it out and put it in writing and if Mr Moyane doesn’t answer the question, let’s discuss with the Speaker’s office what we do, take legal advice and actually go to a court to define the parameters…,” committee chairman Yunus Carrim said, referring to parliamentary law advisor, advocate Frank Jenkins.

Carrim was speaking while Moyane and a team from Sars, along with representatives from Hogan Lovells, the law firm which recommended discliplinary proceedings which cleared Jonas Makwakwa, the revenue service’s chief officer for business and individual taxes, appeared before the committee.

Makwakwa was suspended last year after the Financial Intelligence Centre (FIC) flagged large deposits into his bank account and that of his girlfriend, Kelly-Anne Elskie. Makwakwa returned to work on November 1 after a disciplinary process acquitted him on misconduct charges.

MPs have previously demanded a copy of the disciplinary report but Moyane has steadfastly refused to release it, citing the Financial Intelligence Centre Act which prevents the disclosure of personal and banking information of South African citizens.

Chairman of Hogan Lovells South Africa, Lavery Modise, told MPs their investigation was constrained in that it could not “subpoena witnesses or bank records”.

“Hogan Lovells was only to investigate whether Makwakwa and Elskie had contravened any internal policies and/or the PFMA when effecting certain payments and whether certain ad hoc payments to Makwakwa by Sars were irregular,” said Modise.

“I hasten to add therefore that any suggestion that Hogan Lovells decided not to investigate any aspect contained in the FIC report is fallacious. To the contrary Hogan Lovells recommended that investigations be conducted by the bodies that enjoy statutory powers and the expertise to do so.”

Modise said the criminal investigation was also outside of the firm’s scope.

“Our recommendation was that they be not investigated by us but by the Hawks and Sars. This was so because in our capacity as adviser to the employer, we did not have the power to subpoena bank records or witnesses in the way that criminal investigators do.”

MPs pushed Moyane to answer questions on an investigation into Makwakwa’s tax affairs related to the deposits.

Moyane would not go into specifics, except to confirm that a probe was underway.

“No, that process is not complete.”

Democratic Alliance MPs David Maynier was not satisifed, asking: “We’ve now established that Sars has reinstated an employee that is under investigation for tax evasion or tax offences under the Tax Administration Act by Sars itself, is that correct?”

Moyane responded, saying: “It’s not correct because every taxpayer has the right to be investigated on any other matter. It does not become a criminal issue.”

Moyane insisted that Sars was treating Makwakwa as an ordinary taxpayer and that under the Tax Administration Act it was illegal to make public his tax affairs.

However, Carrim pointed out that Makwakwa was “not just an ordinary taxpayer”.

“He is managing the taxes of the country and there are exceptional responsibilities there where he has to be seen to be above reproach…”

Parliament’s legal advisors will now look into the matter. If the lawyers advise that Moyane can be compelled to respond to unanswered questions, the matter will be elevated to National Assembly Speaker Baleka Mbete’s office before a decision is made on whether Parliament will approach the courts for legal clarity.

– African News Agency (ANA)

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