SARS wants court to rule on R3m bonus dispute

Cape Town – The SA Revenue Service (SARS) is in the process of seeking a declaratory order from the North Gauteng High Court on whether bonuses of R3m awarded to members of the executive committee (exco) in August 2016 should be regarded as irregular expenditure or not.

This was indicated in a report submitted by SARS commissioner Tom Moyane to Parliament’s standing committee on finance on Tuesday. According to the report, no bonus payment was made to the commissioner during that period.

The Auditor General queried the authorisation of the payment of the bonuses to the members of the exco and as an interim measure it was agreed that it will be reported under irregular expenditure in SARS' financial report.

SARS now wants the court to decide on the powers given to the SARS commissioner in terms of the SARS Act (to authorise such payment of bonuses).

“In order to put the legal opinions beyond interpretative doubt, SARS is in the process of seeking a declaratory order on the interpretation of the powers of the SARS commissioner [in terms of] the act,” the report states.

According to the report, the payment of the bonuses to exco members was based on legal opinions obtained by the SARS accounting authority and which confirmed the powers conferred on the SARS commissioner by the SARS Act.

During question time Alf Lees (DA) asked Moyane why the court has been approached to make a ruling on the legality of the payment of the bonuses instead of approaching the minister of finance at the time for permission to make such payments.

Yunus Carrim (ANC), chair of the finance committee, emphasised that SARS is “not just another entity” and when it does not deliver its annual report on time, it is worrying.

Moyane responded that SARS was ready to submit its annual financial report, but a delay was caused due to the difference of view between SARS and the Auditor General regarding the payment of the exco bonuses.

"When we are challenged on issues we think we are right on, it is our duty and responsibility to take it further. When the issue of [the payment] of bonuses were raised, we stood firm to say we were right [to pay them]. We had an amicable agreement with the Auditor General to put the matter to bed once and for all by obtaining a declaratory [court] order," Moyane told the committee.

In his view, the court will be the best suited to solve the matter.

"With respect to bonuses: During Mr Nene’s tenure of office there was an agreement with on paid bonuses. When we paid the bonuses in the subsequent year [then] finance minister Gordhan was revoking that decision. That revoking must be decided by the court. We paid the bonuses per agreement," Moyane told the committee.

During the committee briefing Lees raised the issue of a R930m bonus having been paid to senior SARS official Jonas Makwakwa, who was suspended in mid-September 2016 with full pay and benefits following reports that he allegedly made "unusual and suspicious" deposits totalling R1.2m into a number of bank accounts between 2010 and 2016. Lees was told by the SARS delegation that the bonus was paid before Makwakwa was suspended.

Makwakwa had been cleared of all wrongdoing at an internal SARS disciplinary hearing and returned to SARS in November. SARS issued a statement indicating that law firm Hogan Lovells recommended disciplinary action be taken against Makwakwa, which Hogan Lovells later revealed was for the non-disclosure of external interests. In its own statement Hogan Lovells said that it did not investigate transactions highlighted by FIC.

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