PRETORIA, Friday 16 March 2018 – The South African Revenue Service (SARS) has noted with some dismay the media reports that allege irregular value-added tax (VAT) payments to Oakbay.

SARS finds it necessary to address the unsubstantiated tone of the report published in the Daily Maverick that suggests corruption and a dictatorial attitude on the part of Commissioner Tom Moyane that resulted in R70-million VAT repayments to Oakbay.

SARS wishes to state categorically that the allegations linking Mr Moyane to the refund payment are malicious, disingenuous and part of the well-orchestrated agenda to discredit him. This agenda includes the narrative which hinges on the predictable and unproven assumption that Commissioner Moyane is corrupt, is a lackey of the Guptas and must be “fired” from his job.

When the screaming headlines and frivolous innuendo are stripped away from the story, the incontestable facts are as follows:

On the 22nd of May 2017, Oakbay escalated their complaint to Mr Moyane regarding the payment of a legitimate refund due to them. The escalation of complaints by taxpayers to the Commissioner is a frequent occurrence and it is therefore disingenuous of the journalist to cast aspersions on the SARS Commissioner for receiving this particular complaint.

As part of a standard procedure, the Office of the Commissioner always escalates complaints to the relevant division.

In this instance, the office of the SARS Commissioner referred the complaint to the division which deals with taxpayer complaints, then to legal services.

The referral to legal services was necessary because the complaint was about the interpretation of aspects of the VAT Act.

The undeniable fact that must be stated unambiguously is that at no point did the SARS Commissioner instruct any SARS employee on how to deal with the Oakbay matter.

The  referral of the complaint by the Commissioner to other units of SARS was forwarded by his office as received by Oakbay, with no irregular action on his part.

The legal department, led by Ms Refiloe Mokoena, which compromises of experienced and well respected tax experts, had to provide a legal opinion whether or not the VAT Act allowed for the refund of the taxpayer to be paid into the Oakbay account or a third party account.

Various views were exchanged among the legal experts in SARS and their leader Ms Mokoena, but never with the Commissioner.

Mr Moyane was copied in on the email exchanges that took place among these experts, which is a norm in high-level matters but he never intervened in these email exchanges,  either for or against a particular view.

The SARS Commissioner has always maintained that our legal experts have to make decisions on matters of tax law. It is extremely malicious for the journalist to conclude that by being copied, he therefore agreed with Ms Mokoena’s view.

In fact, the email quoted by the journalist proves precisely this point: that Ms Mokoena, as the head of legal services, made the final decision on the matter.

This decision was then communicated to the division responsible for paying the refund. 

Interestingly and contrary to the journalist’s uninformed view on tax matters, SARS had previously received a similar request that a VAT refund be paid into a third party account. In this case too the legal position adopted by SARS was that this could be done and was not illegal.

The conclusion that the Commissioner’s silence and his non-participation in the exchange of emails among legal experts amounts to agreement with one or other view is frankly absurd.

In fact Section 72 of the VAT Act gives the SARS Commissioner powers to make such decisions, but in this case he did not use these powers – he wanted the experts to make a decision and advise him of their decision.

Although section 72 of the VAT Act refers to the Commissioner, it does not mean literally that the Commissioner must make such a decision. Section 5 of the VAT Act provides that the powers conferred by the VAT Act on the Commissioner may be made by the Commissioner or by any SARS official. Therefore, a decision in terms of section 72 need not be made by the Commissioner, and historically, officials in the legal division of SARS make decisions in terms of section 72.

The application of section 72 of the Vat Act deals with unusual circumstances and there will inevitably be differing legal views and opinions on an issue.

When there are differing legal views, someone has to make a decision. This final decision-making is the duty of the Chief Legal Officer.

The application of section 72 regarding the use of a third-party’s bank account, highlights two fundamental issues:

• Firstly, SARS has an obligation to pay a refund that is properly payable to a taxpayer.
• Secondly, when the peremptory requirement for a bank account belonging to the vendor was inserted in the VAT Act, the Memorandum on the Objects explained that the purpose was to limit fraud.

The decision to permit the use of a third-party’s banking account was taken in the above context.

The journalist repeats her accusation that Commissioner Moyane instructed officials to pay the refund, but in her whole diatribe she has failed to produce any shred of evidence to support the obviously baseless assertion.

Finally, anyone who has ever received a refund from SARS will know that the payment of a refund does not need the Commissioner’s approval. In other words, once Ms Mokoena ruled on the matter it gets referred to the relevant department to ensure automatic payment.

There is never any reason to inform the Commissioner or any reason for him to approve anything.

The above facts demonstrate the dismal but desperate attempt by the journalist to implicate Mr Moyane in a matter that he handled within the law and in which he acted above reproach.

With this in mind, SARS wishes to remind all South Africans that the organisation remains resolute, focused and single-minded about meeting our revenue collection target for South Africa by the end of this month.

CAPE TOWN Tuesday 13 March 2018 – The South African Revenue Service has pledged to submit the Hogan Lovells Report and the Advocate Terry Motau Disciplinary Hearing Report to the Standing Committee on Finance on Friday, 16 March 2018. This was after Mr Makwakwa wrote a letter to the Commissioner authorising him to submit the said report.

In a significant development, it must also be noted that Jonas Makwakwa has agreed that details and information on his personal tax affairs related to the investigation on this matter be divulged and shared with the Finance Minister, Nhlanhla Nene, SCOF Chairman, Yunus Carrim and members of his committee.

SARS recently wrote to the SCOF Chair to convene a panel of legal experts to advise Parliament, Financial Intelligence Centre and SARS to find legal counsel on the matter.

SARS Commissioner Tom Moyane read directly from an 11 March 2018 letter submitted by Makwakwa where he conceded that his tax audit reports can be shared with the Minister and SCOF.

SARS has also noted media reports about the alleged link between Makwakwa and NCIS, one of the 8 agencies appointed through a legitimate procurement process for debt collection of over R16.6-billion of outstanding debt owed to SARS.

SARS will immediately investigate the matter for a speedy and concise resolution of the matter.

In fact, SARS views this allegation in a serious light and will immediately investigate the matter. SARS wishes to state that should any wrong doing be found on the said allegations, SARS will act swiftly, without fear or favour.

SARS’ 14000 men and women remain focused and highly energised to reach their reviewed revenue target of R1.217-billion before the end of March 2018, difficult as it may be.

SARS wishes to reiterate that this development marks a significant turning point that will contribute to the speedy resolution of the matter.

Pretoria, 08 March 2018 – The South African Revenue Service (SARS) is pleased to announce that under the Special Voluntary Disclosure Programme (SVDP), non-compliant taxpayers with unauthorised foreign assets and income have to date entered into agreements with SARS to the value of over R3,3-billion in tax liabilities.

In terms of the agreements reached, these taxpayers have already paid over R2,7-billion to SARS and the Revenue Service expects another R580-million to be paid by the end of March.

The R3,3-billion includes agreements to pay SARS following information contained in the “Panama Papers”.

SARS is encouraged by the fact that more than 759 high net worth individuals have made use of the normal VDP programme since 2012 and that during the SVDP period, 195 high net worth individuals applied. 

The SVDP was announced in the Budget Speech in 2016 by the Finance Minister to give non-compliant taxpayers the opportunity to voluntary disclose unauthorised offshore assets and income.

These taxpayers had a limited window period running from 1 October 2016 to 31 August 2017 to voluntary disclose tax and exchange control defaults specifically in relation to offshore assets.

However, those taxpayers who missed the SVDP can still make use of the normal VDP process to voluntarily regularise their tax affairs.

According to SARS spokesperson, Sandile Memela, the R2.7 billion revenue already collected under the SVDP is a welcomed boost to SARS’ revenue collection efforts as it strives to achieve its upward revised target of R1.217 trillion, which arises under very difficult economic conditions.

“This revenue will go a long way in adding much value to the state’s revenue needs. Our successes under the SVDP are also a signal to other non-compliant taxpayers to talk to SARS before we talk to them,” he said.

Pretoria, Wednesday 28 February 2018 –The South African Revenue (SARS) has paid over R205-billion in refunds across all tax types in the past 10 and a half months.

The amount of R205-billion paid in refunds is more than the total budget allocated for defence, public order and safety in 2017, which amounted to R198.7-billion.

This massive R205-billion payout to individuals and companies, from the beginning of the financial year on 1 April 2017 to 9 February 2018, represents a significant boost to the economy given the current economic climate.

The R205-billion paid out by SARS can be broken down as follows:

• Value-added tax (VAT): An amount of R170.2 billion has been paid so far this year. This is a 6% increase compared to R160.6 billion paid last year at the same time.
• Personal income tax (PIT): An amount of R24.1-billion has been paid so far this year. This is a 16% increase compared to the R20.7 billion paid last year at the same time.
• Company income tax (CIT): An amount of R11.4 billion has been paid so far this year. This is a 5% increase compared to the R10.9 billion paid last year at the same time.

It must be noted that there has been an increase in refund pay-outs across all tax types in the last three years.

VAT refund payments increased from R162.1 billion in 2014/15 to R167.1 billion in 2015/16 and R181.5 billion in 2016/17.

PIT refund payments increased from R20.5 billion in 2014/2015 to R20.8 billion in 2015/2016 and R23-billion in 2016/2017.

CIT refund payments totalled R10.8 billion in both the 2014/2015 and 2015/2016 financial years. It increased to R13 billion in the 2016/2017 year.

While SARS takes great care in paying legitimate refunds to compliant taxpayers it also has the responsibility to clamp down on fraudulent claims.

Since the beginning of the current financial year on 1 April 2017, SARS has stopped refund fraud across all tax types of more than R28-billion.

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PRETORIA, 26 February 2018 – The South African Revenue Service (SARS) is pleased to announce that it has crossed the psychological threshold of the one-trillion rand mark in its revenue collection efforts.

The one-trillion rand mark was reached on Thursday 22 February 2018, making it the third year in a row that SARS reached this milestone. 

Announcing this milestone, SARS Commissioner, Mr Tom Moyane, said the achievement was testament to the organisation’s commitment to reaching the increased revenue target of R 1.217-trillion, which was announced by the Minister of Finance in his Budget Speech on Wednesday.

The Commissioner said he was confident that the SARS revenue management structures and the entire staff in all regions of the country would deliver the revenue needed by South Africa.

“We are focused on closing all revenue leakages through non-compliance and our staff will spare no effort in reaching the revenue target by 29 March, even though the economy is not performing to our expectations,” Mr Moyane said.

“We believe that our efforts will provide government with the requisite fiscal space to free up resources for its developmental objectives while allowing it to better manage the levels of debt we are facing,” said the Commissioner.