PRETORIA, Friday, 15 December 2017 — The South African Revenue Service (SARS) will collect the Sugary Beverages Levy (SBL) as from 1 April 2018.

The levy falls under the Rates and Monetary Amounts and Revenue Laws Amendment Bill, 2017, as passed in Parliament on 5 December 2017.

Part 7A of Schedule No.1 to the Customs and Excise Act, 1964, provides for a health promotion levy on sugary beverages which have been manufactured in or imported into South Africa. Imported products will be taxed when they are cleared for home consumption and locally manufactured products will be taxed at source.

SBL returns and payments can be submitted electronically through SARS eFiling and will also be accepted at Customs and Excise branches.

Licensing and registration of manufacturers of sugary beverages will take place from February 2018. Only commercial manufacturers that produce sugary beverages with a total annual sugar content in excess of 500 kg per year need to be licensed and pay the SBL. Non-commercial producers below this threshold will be expected to register but will not be subject to the SBL.

The levy is fixed at 2.1 cents per gram of the sugar content that exceeds 4 grams per 100ml, which means the first 4 grams per 100ml are levy free. The levy is part of government’s programme to prevent and control non-communicable diseases (NCDs) and assist in the prevention and control of obesity.

SARS will engage industry stakeholders during roadshows to guide them through the process. Dates for the roadshows will be published on the website in January 2018. Information about the SBL is available on the SARS website www.sars.gov.za.

PRETORIA, WEDNESDAY 13 DECEMBER 2017 – A Cape Town man was sentenced to twelve years effective imprisonment for large-scale Value Added Tax (VAT) fraud in the Wynberg Magistrate Court on Monday, 11 December 2017.

Johannes Tobias Wessels from Kraaifontein fabricated invoices from five of his businesses to claim fraudulent VAT refunds in excess of R15-million from SARS over a period of seven years.

Wessels pleaded guilty to 403 charges of fraud and 11 charges of contraventions of the Income Tax Act in terms of a plea and sentence agreement with the State. The contraventions of the Tax Act comprised six counts for the non-submission of income tax returns and five counts for failure to keep proper books of accounts. He was sentenced to fifteen years imprisonment, with three years is conditionally suspended. This included 18-months imprisonment for failure to submit income tax returns.

The VAT refunds were not based on actual transactions. Instead, Wessels obtained the unlawful refunds by creating fictitious invoices and shifting money between his businesses. He used a significant amount for his personal benefit, of which “a significant amount was spent on gambling”.

In a separate matter, Mr Wessels was sentenced to seven years imprisonment on fifteen charges of VAT fraud last year. An appeal against this sentence has since been dismissed. He will serve this seven-year sentence concurrently with the twelve year sentence handed down yesterday.

These successful prosecutions clearly demonstrates that SARS has the skills, experience and determination to effectively detect non-compliance by taxpayers and ensure such perpetrators face the full might of the law. The convictions are a strong warning that anyone that attempts to avoid their tax obligations through irregular means will be dealt with accordingly.

With this in mind, SARS wishes to assert that the organisation remains resolute, focused and single-minded in ensuring everyone pays their fair share of tax.

PRETORIA, MONDAY 11 DECEMBER 2017 – SARS notes and welcomes the outcome of the Commission for Conciliation, Mediation and Arbitration’s award on Mr Adriaan Lackay’s constructive dismissal case.

The CCMA has found that Mr Lackay’s has failed to prove that he was constructively dismissed but instead terminated his service for prospects of employment opportunities.

It is common cause that in March 2015, Mr Adriaan Lackay referred unfair dismissal dispute to the CCMA, alleging that SARS, in particular Commissioner, Tom Moyane made his employment intolerable, thereby constructively dismissing him.

SARS is satisfied that the CCMA has confirmed SARS long held view that Mr Lackay was aware that he had no case but proceeded with these vexatious and frivolous allegations as part of the broader campaign to cast aspersions and tarnish SARS name and that of its leadership, especially Mr Moyane.

The above view by SARS is further confirmed by the fact, although Mr Lackay never reported to the Commissioner for SARS, Mr Moyane, he however insisted in his dispute referral to the CCMA as well as in his ‘fabricated’ and concocted evidence that Mr Moyane, not his manager, made his employment tolerable. SARS has always disputed this position as legally unacceptable.

 As the CCMA commissioner correctly stated, ‘… In fact, this demonstrates how the applicant (Mr Lackay) twists words to suit his own purpose. Mr Lackay made allegations of how misleading or lying to the media posed a reputational  risk, however strangely enough when it suits his case…he wanted the Commissioner to lie to the media’.

SARS has observed and was deeply concerned at the demonstration of malice, disingenuousness and misrepresentation of facts by Mr Lackay’s allegations which were intended to blemish the integrity of the SARS Commissioner, Mr Moyane, at the CCMA.

SARS further agrees with the CCMA Commissioner that the fears Mr Lackay created through evidence were ‘fabricated and cannot be accepted’. What is even more concerning is that Mr Lackay’s evidence, which the CCMA Commissioner found to have no substance, truth and a fabrication, were made under oath. 

SARS continues to maintain its position and wishes to reassure the people of South African that the institution is focused and single minded in achieving its crucial mandate of collecting all revenue due whilst protecting all ports of entry.

Notwithstanding very difficult economic conditions both globally and locally as well as a tough revenue target, the 14000 SARS employees will continue to work even harder in ensuring that all revenue due to the state is collected.

Pretoria, 30 November 2017 – The South African Revenue Service (SARS) today releases trade statistics for October 2017 recording a trade balance surplus of R4.56 billion. These statistics include trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS). The year-to-date (01 January to 31 October 2017) trade balance surplus of R51.62 billion is an improvement on the deficit for the comparable period in 2016 of R9.93 billion. Exports for the year-to-date grew by 6.6% whilst imports for the same period declined by 0.2%.

Click here for the full document.

PRETORIA, MONDAY 27 NOVEMBER 2017 – SARS notes with deep concern media reports spreading the allegation that there has been impropriety on the part of Commissioner Tom Moyane in dealing with the disciplinary investigation into Chief Officer: Business & Individual Taxes, Mr Jonas Makwakwa.

SARS finds it necessary to address the unsubstantiated tone and the blatant misrepresentation of facts. In fact, this is a predictable and monotonous media narrative that is aimed at casting aspersions on the integrity of the organization.

It will be appreciated for reportage and analysis to be balanced, fair and accurate. While SARS supports media freedom, we cannot allow such low standards of journalism to go unchallenged and wish to set the record straight.

Firstly, it is not true that Hogan Lovells did not investigate the Financial Intelligence Centre (FIC) suspicious transactions. Neither is it true that Hogan Lovells issued a media statement to that effect.

All transactions as per the FIC suspicious report were put to Mr Makwakwa to respond and he did. It was those responses which lead to Hogan Lovells concluding that an act of misconduct could not be found from the transactions and their sources.

SARS wishes to assist with a factual and chronological account of events. Mr Moyane received the Financial Intelligence Centre (FIC) Report in May 2016.

After seeking advice, he placed Mr Makwakwa on precautionary suspension on 15 September 2016 so as to investigate whether or not any possible misconduct may have been committed by Mr Makwakwa relating to the FIC report.

The firm Hogan Lovells, an international and renowned law firm, was appointed to conduct this investigation.

In essence, their mandate which clearly reflects in their terms of reference was to determine whether any misconduct had been committed by Mr Makwakwa and/or Ms Kelly-Anne Elskie in their capacity as SARS employees.

Whilst on suspension, Mr Makwakwa committed what SARS believed to be a breach of his suspension conditions. This arose from a telephone call he made on 13 January 2017 to a SARS employee regarding an active tax matter.

On 20 January 2017, whilst the main investigation was still ongoing and whilst on suspension, disciplinary charges were served on Makwakwa relating solely to this breach of his suspension conditions.

Hogan Lovells concluded its investigation based on the mandate stated above and delivered an investigation report to Mr Moyane in June 2017. The Hogan Lovells report concluded that there was no prima facie evidence that Mr Makwakwa had committed any misconduct in relation to the financial transactions emanating from the FIC report.

However, the recommendation was that Mr Makwakwa be charged for violating the SARS Conflict of Interest disclosure provisions as well as the SARS Code of Conduct.

A decision was then taken to expand the existing charges already served on Mr Makwakwa in January 2017 to include charges relating to the allegation of non-disclosure.

Mr Moyane appointed Advocate Terry Motau, SC, a senior counsel from the Johannesburg Bar, to chair the disciplinary enquiry with the guidance and assistance of Hogan Lovells.

The expanded enquiry concluded on 15 August 2017 and the outcome was received from the chairperson on 13 October 2017. 

Accordingly, Mr Makwakwa was found not guilty of all charges. Contrary to media reports spreading the allegation that the processes were tainted and that Mr Moyane had a hand in allegedly tainting the processes, the above clearly demonstrates a patently fair, unbiased and independent process.

SARS is concerned that wide spread media reports seem to suggest that SARS erred by allowing Mr Makwakwa back into his employ given that there is a criminal matter pending. This assertion displays a lack of understanding of the difference between a misconduct investigation by an employer and a criminal investigation.

It is common knowledge that FIC – not SARS – referred the matter to the South African Police Service for an investigation on possible criminal acts.

Thus in September 2016, upon enquiry, Mr Moyane was advised by the Directorate for Priority Crime Investigation (DPCI) that an enquiry into Mr Makwakwa and Ms Elskie, arising from the FIC report, was on-going under enquiry number 03/06/2016.  

In law, disciplinary proceedings and criminal proceedings are distinct and are governed by different legislation.

As an employer, Mr Moyane’s jurisdiction only goes as far as determining whether or not there is any misconduct related to the employment relationship. The responsibility to pursue criminal charges in a court of law lies with the National Prosecuting Authority based on investigations by the SAPS or DPCI.

Given the outcome of the SARS disciplinary process and the fact that no decision had been taken by DPCI on whether or not Mr Makwakwa should be criminally prosecuted at that time, Mr Moyane was advised that there was no legal justification for SARS not to lift Mr Makwakwa’s suspension.

As a result, he was allowed to resume his duties with effect from 1 November 2017. Any other action would have amounted to a violation of Mr Makwakwa’s legal rights as an employee.

It is important to be aware that SARS’s rights have been reserved to initiate possible new internal disciplinary proceedings should the outcome of the criminal process dictate so. 

SARS notes that the media reports seem to insinuate incorrectly that SARS has refused to release the report by Hogan Lovells.

Mr Moyane has sought legal guidance regarding the release of the FIC and Hogan Lovells investigation reports. The advice he has received suggests that a crime would be committed should these reports be made public.

Similar observations were made by the chairperson of Standing Committee of Finance (SCOF), Mr Yunus Carrim in his letter addressed to the Commissioner Moyane dated 6 November 2017, in which he noted the possibility that legal reasons may exist for the non-release of the reports.

To reach consensus and ensure closure on this matter, Mr Moyane has written to SCOF chairman Mr Carrim, making the following proposal:

* That a team consisting of legal representatives from SARS, the National Assembly, Treasury and FIC meet urgently to collectively engage and agree on a seasoned Senior Counsel to deliver an opinion on the legal permissibility of disclosing the reports

* That the National Assembly facilitate the process bearing in mind the urgency to get clarity on this matter.

The above detailed background and the process we are requesting of SCOF demonstrate our willing to always be transparent to the public so that we are forever beyond reproach.

As stated before, SARS has no objection to making these reports public, but as an organ of state would not want to violate the rights of an employee in doing so.

SARS is deeply concerned about apparent bias, irresponsible and mischievous attitude to cast aspersions on the character of the organization to perpetuate a negative narrative of an organization that is undermining the rule of law.

SARS finds it regrettable that some media reportage and analysis continues to promote the perception that an outstanding revenue collection agency is falling apart.