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MEDIA STATEMENT BY SARS COMMISSIONER TOM MOYANE

There have been media allegations against some of the Senior Officials within South
African Revenue Service (SARS). The allegations were initially levelled against Mr.
Johan Van Loggerenberg. After these allegations surfaced, Mr. Ivan Pillay, who was
the Acting Commissioner, appointed a panel to investigate the existence and
truthfulness of the allegations, and Advocate Muzi Sikhakhane SC, together with his
panel of senior advocates were accordingly tasked to investigate the allegations.

In the midst of the investigation, further allegations were made by the media about
illegal activities of a covert unit, which were published in a Sunday newspaper on 12
October 2014.

The terms of reference for the panel were:

(a)

Whether there was any breach of the confidentiality provisions


contained in Chapter 6 of the Tax Administration Act 28 of 2011, as
amended (the TAA) relating to the breach of the SARS oath of
secrecy;

(b)

Whether there was any breach of section 7(a) and/or (b) of the TAA,
as amended, relating to conflict of interest;

(c)

Any possible breach by Mr. Van Loggerenberg of any law arising from
the unlawful interception of information;

(d)

Any engagement in corrupt activities; and

(e)

Any act of impropriety in general or in terms of any law as well as any


allegation that may come to light in the course of the investigation.
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I received the report on 5 November 2014, which I made available to the Minister of
Finance, and the members of the SARS Executive Committee.
The Panel made the following observation, and I quote: The panel expressed its
disappointment that the existence of this (covert) unit was not volunteered to the
panel in the early stages of its investigation. Even when the panel later confirmed its
existence through other sources, some of the relevant witnesses within SARS
management presented what seemed like a rehearsed narrative, whose object may
have been first to mislead the panel, and second, to present the existence of such a
unit in the positive and lawful light. This narrative, ignored one simple legal
imperative that SARS cannot and should not engage in the intelligence or
investigate functions which reside in other agencies of the state.

I consulted relevant stakeholders about the findings of the report. Informed by those
consultations, and having received advice from independent attorneys, assisted by
Senior Counsel, I, as an accounting officer of SARS and in terms of the powers
afforded to me by the SARS Act, concluded to suspend and cause disciplinary
proceedings to be undertaken against those employees who have been implicated in
the report.

Based on the findings and recommendations as set out below, I have therefore
decided to suspend the following two senior executives pending a disciplinary
process in terms of the SARS disciplinary code and procedure, and applicable labour
laws including the Labour Relations Act:
a. Mr Ivan Pillay, Deputy Commissioner of SARS
b. Mr Peter Richer, Group Executive: Strategic Planning and Risk
The Panels findings are as follows:

(a)

While SARS remains an efficient and effective organisation, the


unlawful establishment of a unit that operated ostensibly in a covert
manner, has created a climate of intrigue, fear and subterfuge within
the organisation;
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(b)

The establishment of the unit without having the requisite statutory


authority was indeed unlawful;

(c)

There is prima facie evidence that the unit may have abused its power
and resources by engaging in activities that reside in the other
agencies of Government, and which it had no lawful authority to
perform;

(d)

There is prima facie evidence that the recruitment, funding and


practices of the unit were in violation of SARSs own Human
resources policy;

(e)

There is prima facie evidence that the existence of this unit had the
real possibility of undermining the work of those agencies tasked with
the investigation of organised crime and the collection of intelligence;
and

(f)

There is prima facie evidence suggesting that the activities of the


Special projects Unit may have included rogue behaviour that had the
potential to damage the reputation of SARS as an organ of state.

In light of these findings, the Panels recommendations are as follows:

(a) SARS should clearly develop formal operational relations with state
agencies authorised to gather intelligence and investigate organised
crime. In this regard, SARS in cooperation with the relevant organs
should develop clear guidelines for cooperation in respect of SARS
own mandate.
(b) SARS should conduct a forensic investigation into all the settlements
concluded with taxpayers that had been under investigation since
2005.
(c) The Commissioner must move speedily to put in place a process to
ensure that the NRG or HRIU are truly disbanded, persons involved are
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debriefed, protected from intimidation and are reintegrated into SARS


official and civilian structures

In addition, I will take the following further steps:

1) Refer the findings on the possible breach of intelligence and associated


legislation to the Inspector General of Intelligence
2) Disband the covert unit and conduct a forensic investigation to ensure that the
alleged unit and its activities cease to exist in its entirety.

I would like to reassure South Africans that the SARS management team and
employees are committed to:

The highest level of integrity;

Best service to South Africans; and

Fair implementation of tax and customs laws.

The South African Revenue Service is one of the key pillars of our democratic
government. It is an institution built on trust and integrity. It is therefore critical that
SARS employees, especially senior officials, behave in a manner that is above
reproach.

Issued by: SARS


Date: 5 December 2014

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