Another blow for Mkhwebane as court rules SARS can withhold taxpayer records

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The South African Revenue Service may withhold taxpayer information, the Pretoria High Court said on Monday, as it ruled in a court battle that has seen Public Protector Busisiwe Mkhwebane attempting to access former president Jacob Zuma's tax records from the revenue service. 

Mkhwebane's counter-claim was dismissed with costs. She will have to pay 15% of SARS Commissioner Edward Kieswetter's legal costs out of her own pocket.

In a scathing judgment, Judge Peter Mabuse ruled that officials at the tax agency are permitted to withhold taxpayer information. In addition, the Public Protector's subpoena powers do not extend to taxpayer information.

It was of "paramount importance" to note that the Constitution required that the public protector's powers be regulated by national legislation, according to the judgment.

The Public Protector and the revenue service have been engaged in a court battle over the former president's tax records after Mkhwebane subpoenaed the records in October 2018. In November, SARS launched an urgent court bid to block Mkhwebane's access to Zuma's tax information. 

Mkhwebane argued she needed access to Zuma's tax information as part of an investigation. Her probe follows a 2017 request from then-Democratic Alliance leader Mmusi Maimane to look into Zuma's tax affairs after investigative journalist Jacques Pauw, in his book The President's Keepers, stated that the former president had received a R1 million salary from a private security company run by his associate Roy Moodley after he became president.

In his ruling on Monday Mabuse stated that it was furthermore "fatal" for Mkhwebane to have sought relief on former president Jacob Zuma's behalf on the basis of "unsubstantiated Tweets". This followed an earlier claim from Kieswetter that that there was no legal proof earlier tweets which had ostensibly come from Zuma in support of Mkhwebane were really from the former president.

"[The tweets] are not, without much ado, admissible as evidence," the judgment read. "The Public Protector has not made a good case for the counter claim."

In terms of the costs order, the judgment said the Public Protector was a "public litigant" who was expected "always to act with a high degree of perfection" and with "care and respect for the Constitution and the law".

"[S]he should never show any gross disregard for her professional responsibilities or act inappropriately in an egregious manner."

Kieswetter had argued the public protector's subpoena powers should not extend to accessing taxpayer records, citing taxpayer confidentiality. Analysts, meanwhile, have argued the case could be precedent-setting. It came amid escalating tension between the Public Protector and the revenue service.

The former president, meanwhile, said that he was happy for his tax records to be handed over to Mkhwebane's office by the revenue service. 

When the matter was before the judge, Mkhwebane’s lawyer Dali Mpofu, argued that the Public Protector's powers were wide-ranging. Jeremy Gauntlett QC SC, for Kieswetter, argued that protecting taxpayer confidentiality was crucial.

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