Cape Town - The South African Revenue Service (SARS) has said a speech made by British peer Peter Hain about the tax collection agency being linked to corruption was “unfortunate and regrettable”.
“These allegations are not new and were responded to exhaustively in Parliament in South Africa on two occasions, including to the South African media,” said SARS spokesperson Sicelo Mkosi in an emailed statement to Fin24.
Lord Hain, a Labour party politician in the UK House of Lords, on Monday accused London-headquartered law firm Hogan Lovells of being complicit in state capture due to the work it did for SARS.
Hain said the law firm had authored a “whitewashed” investigative report in 2017 after probing top SARS executive Jonas Makwakwa for alleged financial misconduct.
Makwakwa was suspended in late 2016 after the Financial Intelligence Centre red-flagged suspicious transactions amounting to R1.7m that were paid into his bank account and that of his partner Kelly-Ann Elskie.
Hogan Lovells was asked to investigate Makwakwa by SARS head Tom Moyane.
Makwakwa returned to his post at SARS in November last year after he was found not guilty in a disciplinary hearing based on the Hogan Lovells report.
'Lack of understanding'
In his speech, Hain characterised Makwakwa and Moyane as corrupt.
"When Hogan Lovells was engaged by the corrupt Moyane in September 2016, it was well known that he and Makwakwa were synonymous with President Jacob Zuma’s capture of the state," he said.
SARS, in response to a request for comment, pointed Fin24 to a previous statement it had issued concerning the law firm’s investigation
On November 27 2017, SARS said the investigation into Makwakwa had proceeded by the book and was a "patently fair, unbiased and independent process".
“SARS is concerned that widespread 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 said.
At the time, the revenue collection agency said it was being treated unfairly in the media.
“SARS is deeply concerned about apparent bias, irresponsible and mischievous attitude to cast aspersions on the character of the organisation to perpetuate a negative narrative of an organisation 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.”
Hogan Lovells, meanwhile, on Monday denied Hain’s assertion that it had become caught up in state capture in South Africa, saying his speech reflected a lack of understanding of the work it was asked to carry out by SARS, and was based on incorrect South African media reports.
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