SARS must ensure that tax is paid on Zuma legal fees donations

The Democratic Alliance (DA) will write to Mark Kingon, Acting Commissioner of the South African Revenue Service (SARS), to request that SARS ensure that donations tax be collected on all donations made towards the legal fees of former president Jacob Zuma.

According to media reports, a group of Zuma supporters have pledged to pay his R10 million cost order after the North Gauteng High Court dismissed his leave to appeal last week.

Millions in legal costs were incurred during Zuma’s fruitless attempts to have former Public Protector Thuli Madonsela’s State of Capture report reviewed and to set aside her remedial action, notably the establishment of a judicial commission of inquiry into State Capture.

The court’s decision was a victory for vulnerable South Africans who have been suffering poor service delivery precisely as public funds were being diverted to pay for legal fees incurred by Zuma in his self-serving attempts to sanitize his leading role in the State Capture project.

It would be a miscarriage of justice if Zuma’s personal cost order is financed, much like his lifestyle, by a band of sympathizers. It would be even worse if these individuals avoid their tax obligations, too.

Zuma’s ruinous presidency has cost South Africa too much already.

SARS is saved from Moyane

The DA welcomes the announcement that President Cyril Ramaphosa has dismissed Mr. Tom Moyane as the Commissioner of the South African Revenue Service (SARS).

In the short period of a mere three and a half years in charge of SARS, Tom Moyane managed to reduce the vital entity  from being a world leader in tax collection to being a friend of the ANC’s State Capture project.

In the words of Judge Nugent in the Interim Report of the Commission of Inquiry into Tax Administration and Governance by the South African Revenue Service, “the day Mr. Moyane took office was a calamity for SARS.”

The DA expresses its thanks to Mark Kingon, the acting SARS Commissioner, for taking on the very difficult task of stopping the destruction at SARS and starting to fix the rot left by Tom Moyane. We urge him to continue the valuable work he has embarked upon and therefore ensuring that the path towards restoring taxpayer trust in SARS is not deviated from.

Fully restoring the reputation of SARS in the eyes of the public will require the urgent appointment of a permanent Commissioner of SARS. The identification of a new SARS Commissioner must be completely transparent and must be based solely on merit.

President Cyril Ramaphosa would be misguided to simply rely on section 6.(1) of the South African Revenue Service Amendment Act No. 46 of 2002 to appoint a new SARS Commissioner as he sees fit.

Instead President Ramaphosa must embark upon a completely transparent process to identify the best possible candidates of impeccable integrity and then to take considered advice from a range of experts in the tax and revenue collection fields before determining who the new SARS Commissioner is to be.

DA refers KMPG to Independent Regulatory Board for Auditors

The Democratic Alliance has written to the Independent Regulatory Board for Auditors (IRBA) requesting a thorough review of KPMG’s conduct over the last three years.

KPMG has been implicated in the “Great Bank Heist”, after they allegedly turned a blind eye to irregularities and corruption at the bank. Today, it emerged that millions of rands in donations may allegedly have been made to the ANC, at the behest of then-ANC Treasurer-General Mkhize Zweli, but KPMG failed to flag these irregularities.

The auditing firm has also been implicated in various ANC/Gupta state capture fiascos, as well as authoring the SARS “Rogue Unit” Report.

Corruption is not a victimless crime as demonstrated from the VBS heist that directly impacted South Africans, especially the poor. KPMG’s apparent corrupt collaboration with ANC elites has cost South Africa dearly, and we are still footing the bill.

Necessary enforcement actions need to take place to ensure that KPMG is held accountable for any misleading and/or fraudulent reports.

KPMG has not met the necessary standards required to perform its vital function, and as such, the firm may be in breach of its fiduciary and legal responsibility.

The firm’s actions have cast a dark shadow over the audit profession, which has a vital role to play in the fight against corruption.

By turning a blind eye to numerous allegations of misconduct, KPMG has effectively facilitated corruption and has brought into question the controls, checks and balances at the firm.

The DA trusts that IRBA will probe KPMG’s role in these scandals to ensure that the necessary enforcement action is taken to ensure that the firm is held accountable for any misleading and/or fraudulent reports.

Let’s vote out job-killing corruption, and vote in change that builds one SA for all

The following remarks were delivered today by Democratic Alliance (DA) Leader, Mmusi Maimane, at the Eastern Cape provincial launch of the party’s Team One SA campaign outside a failed public/private job-creating initiative in Chatty, Port Elizabeth. Maimane was joined by Eastern Cape Premier Candidate, Nqaba Bhanga, Team One South Africa Spokesperson for Women, Nomafrench Mbombo, and DA Federal Chairperson, Athol Trollip.

Fellow South Africans,

Today we kick off the DA’s 2019 election campaign in the Eastern Cape. A campaign in which, over the next seven months, we will take our message of “Change that Builds One South Africa for All” to every corner of this province.

And while our focus this morning is on bringing our vision of a better future to the people of South Africa, our attention tomorrow will be on Finance Minister Tito Mboweni’s first Medium-Term Budget Policy Statement, where he will have the opportunity to show whether the ANC can finally put its own interests second and the people’s interests first.

Our people are suffering, and they are suffering as a direct result of ANC policy failure. Our recession, our falling currency, our tax increases and petrol price increases, our spiraling unemployment and our growing poverty aren’t because of global conditions. Our global peers are growing. Our African neighbours are growing. Our economic trauma is all self-inflicted.

Tomorrow Minister Mboweni has a chance to start correcting this. To disassociate himself from EFF-style rhetoric and to walk away from his damaging statements on state intervention in everything from mining and banking to land ownership. This is his chance to finally put poor, unemployed and mostly young South Africans first.

Minister Mboweni has an opportunity tomorrow to show that he can increase private sector investment, that he can stabilise national debt below 50%, that he can take rational decisions on our failed SOE’s, that he can bring stability to SARS and that he can provide clarity on the mega-loans being negotiated with China behind closed doors.

If he can’t do this, then it surely makes no sense to persist with this ANC government.

Fellow South Africans, there is a very good reason why we’re launching our election campaign in Chatty, and specifically here by this building behind me. We chose this site because this building stands as a testament to the corruption and neglect of the ANC in government here in NMB.

What you see here – the crumbling structure, the stripped out interior and the lack of any activity and enterprise – is a perfect metaphor for the legacy of the ANC. The very same ANC who, with the help of the EFF and the UDM, have now been allowed back in to government here so that they can pick up where they left off.

Back in 2003, this building was chosen to be the home of the Bethelsdorp Hand Weavers, a carpet factory started as part of a project to provide jobs, develop skills and eradicate poverty in this part of NMB. It was run by an NGO that received funding from the local ANC government, and it employed 200 women from the community.

In principle, this all sounds good. But in reality, this turned out to be just another looting scheme where the money ended up in the pockets of a few corrupt individuals, and government provided no oversight and no control over where its funds went.

And so, while the corrupt got rich, this enterprise failed. The women who worked here went for months without being paid. Today, a decade after the factory closed its doors, most of these women are still unemployed.

In a province like the Eastern Cape, and specifically a community like Bethelsdorp with its sky-high unemployment rate, it is shameful that there was no accountability in the ANC government for precious public money, and particularly money meant for job creation.

And yet this is the standard operating procedure for the ANC. Here in NMB, this kind of looting of public money happened in virtually every contract, tender and project undertaken by the ANC government over two decades. It was all just easy money, and no one bothered to think of the people affected by it.

When Jacob Zuma said, back in 2009, that charges against him should be dropped because corruption wasn’t a “real crime” and that there are no victims involved, he wasn’t just speaking for himself. He was speaking for every ANC minister, mayor and councillor who believed that all money was there to be taken.

Well, I’m here today to tell them they are wrong. Corruption has victims. Real people with families and dependents. Parents, siblings, breadwinners. Corruption’s victims are those who are left to deal with the unemployment and poverty, and all the crime, drugs and violence that follows.

The people of Bethelsdorp are victims of corruption. The hundreds of women who lost their jobs at this factory are victims of corruption. Their families who were counting on an income are victims of corruption. These factory doors may have closed ten years ago, but they remain victims today.

If you want to know why communities like these need change, just speak to the people affected by corruption-failed projects like these. Some of these women are here with us today. Ask them if they want to go back to the ANC way of doing things.

We cannot go back there. The Eastern Cape certainly can’t go back there. This is the province with the highest expanded unemployment rate in South Africa. Almost 46% of working-age men and women in this province cannot find a job. Young people leave this province in droves in search of opportunities elsewhere.

That is why we are gathered here today to launch our election campaign in this province. We are here to say: Our country needs change. We need a fresh start so we can rebuild our society and an economy that works for all.

Under the ANC government we ended up with a massively divided nation. There are those on the inside, people with jobs, education, opportunities, and there are those on the outside, millions of South Africans who live in poverty and who have no hope of finding employment. This must change.

Under a DA government we will bridge this divide. We will focus all our efforts on bringing the outsiders into the economy by supporting enterprise, attracting investment and helping businesses large and small to create jobs. We will unite South Africans around this goal instead of dividing, blaming and creating enemies.

The DA will bring change that builds one South Africa for all.

No other party is promising to do this. No other party even pretends to speak for all South Africans, or offers a plan that will grow the economy, create jobs, make our communities safe and speed up basic service delivery.

Under the leadership of our Premier candidate, Nqaba Bhanga, we will take this message to every city, town and village in the province. Because it is of the utmost importance that we bring clean, accountable DA government to the people of the Eastern Cape.

In two short years, the DA-led coalition government in NMB brought more progress to areas like Bethelsdorp than the ANC did in two decades. Not far from where we’re standing is the new depot for the new Integrated Public Transport Service. Also near us is the new station for the Metro Police. Roads were tarred, basic services were expanded.

Now all this progress is threatened once more by the reinstatement of the ANC/EFF coalition of corruption in this metro. This is a step backwards, towards neglect, towards poverty and towards unemployment.

Fellow South Africans, we need to move forward as a country, not backwards. And to do so we need a government that looks to the future, not the past. There is only one party that can be this government, and that party is the Democratic Alliance.

Only the DA can grow the economy for all

The following remarks were delivered by the Leader of the Democratic Alliance, Mmusi Maimane, during an urgent debate on ways to mitigate the economic recession in Parliament today. 

Honourable Members,

The choice we face as a country is simple: Which world do we want to live in?

Because these are two options available to us: One is the world of the ANC, and the other is the world of the DA. Each of these choices will lead us towards a distinct future.

Economists have described the ANC’s world as a pre-1990 universe. A world in which the Berlin Wall is yet to come down.

In their world, the State is everything, and must do everything.

In their world, SOE’s – no matter how badly run – are the answer.

In their world, citizens can’t be trusted to control their own destiny or own their own land. The state knows what’s best for you.

In the other world – that of the DA and many others who share our view – people hold the power over their own lives.

In our world, citizens have agency. They can own their land, run their businesses, build their wealth.

In our world, more often than not, the state must get out of the way of enterprise and progress.

Our world is one of inclusion and growth.

This is the choice we face, Honourable Members, as we contemplate the reality of a country in deep, deep crisis.

I’m not going to waste your time telling you about the extent of our economic distress. We all know this.

9.6 million people cannot find work.

Real per capita income has been dropping for the past five years.

Our national debt has ballooned to R3 trillion.

And we now face the threat of a further sovereign rating downgrade.

Anyone still denying that South Africa is in the midst of a severe economic crisis has no business standing up here on this podium today debating solutions.

Parliament should ask why we find ourselves here, and what we should do to fix it.

One analyst described our situation this week as “death by a thousand cuts”, referring to the many factors that came together to paralyse our growth and bleed our fiscus dry. And this is largely true.

Yes, corruption has cost us dearly. As much as R100 billion, according to some estimates.

Yes, the crisis at SARS has led to a huge under-collection of around R50 billion.

Yes, the never-ending bailouts of our poorly-run State-Owned Enterprises continue to divert tens of billions of Rands away from other crucial budget items each year.

Yes, our ever-expanding public sector wage bill along with our massive cabinet place a drain on our fiscus that we simply cannot afford.

Yes, populist policies such as Expropriation Without Compensation, the nationalisation of the Reserve Bank and the proposed NHI are a recipe for economic disaster.

All of these things played a part in bringing our economy to its knees.

But they pale in comparison to the biggest cause of them all – the economic elephant in the room that still goes unmentioned in so much of the analysis.

What lies at the very heart of our country’s crisis is the ANC.

The fact is this: The ANC doesn’t accept responsibility for causing this recession, and it has no plan to get us out of recession.

This administration is only seven months old, but it is already stumbling around in the dark looking for excuses, instead of facing up to hard truths.

There is no plan. There is no firm direction.

You can come here today and attack the DA’s plan to rescue the economy, but we have a plan. And where we govern, this plan is working.

In Johannesburg, the government of Mayor Mashaba has already attracted more than R6 billion in investment since taking over in 2016.

In Tshwane, Mayor Msimanga’s government has tripled investment in the metro.

75% of new jobs added in the past year were created in the DA-run Western Cape.

Honourable Members,

We all know that South Africa has a big problem. And it is a problem that won’t be solved with a stimulus package or an investment conference.

The root of our problem is an ANC that has no shared, positive vision for our future, never mind the ability to lead us there.

We have already been left behind by the rest of the world – and indeed by our African neighbours.

While the rest of the world surges forward with innovative and dynamic economies, we are retreating back to a time of state-led economies.

While the rest of the world embraces inclusive economic growth as the instrument to lift people out of poverty, we can’t look beyond redistributing what’s already there.

Our government is so obsessed with control, it cannot see how it is suffocating enterprise and strangling small business.

It honestly believes that every state failure just needs another state programme to fix it.

You cannot grow like this. This has to change.

Stop blaming the Global Financial Crisis. That was ten years ago. The world has moved on.

Stop blaming Jacob Zuma, as is fashionable these days. Jacob Zuma didn’t cause this mess, he only exploited it because he was allowed to.

The blame lies squarely at the feet of the failed ANC, collectively.

And if the ANC government can’t swap its outdated worldview for one better suited to the 21st century, then we must swap the ANC government for one that can take this country forward. That is the DA.

I know our country is ready to become part of a dynamic global economy. Just this morning I visited a business incubation and training centre in Delft, and what I saw there was inspiring.

We certainly don’t lack motivated people with ideas.

Honourable Members,

If there is real commitment to “picking up” the Rand and turning the economy to growth, then it is time for real choices. Hard but necessary choices that will restore investor confidence and get us out of the red.

Number One: We must cut loose the SOE’s that are dragging us under. This means the privatisation – or at least part-privatisation – of South African Airways, and splitting Eskom into two separate businesses, one for power production and one for power distribution.

Number Two: We must put an end to the stifling Eskom monopoly by allowing cities to purchase electricity directly from independent power producers.

Number Three: We have to curb spending and stabilise our national debt at 50% of GDP by introducing a fiscal austerity package. All revenue shortfalls must be covered by cutting waste, and not by increasing taxes.

Number Four: We must trim our Cabinet by more than half. Our massive executive with its double ministers for each portfolio is a direct result of patronage politics. We simply can’t afford this.

Number Five: We must exempt small businesses from complying with unworkable labour legislation. Those employing less than 250 people must be given every chance of success, and the only labour laws they should have to adhere to are the Basic Conditions of Employment.

Number Six: Immediately settle all budgeted-for invoices that are owed to small businesses by National and Provincial governments. This alone will add a R28 billion boost to the SMME sector.

And Seven: Scrap the reckless populist policies that are destroying investor confidence in our country and have sent business confidence to an all-time low.

Abandon your irresponsible and reckless plunge towards Expropriation Without Compensation. Let’s reform the land and keep our Constitution intact.

This doesn’t mean land reform and restitution must be delayed. On the contrary, it must be sped up, and it must involve the transfer of full title. But this cannot be done at the expense of property rights and the rule of law.

Stand up for the independence of the Reserve Bank, instead of trying to nationalise it. Protect and defend our excellent Governor; stop undermining him.

If we can implement these changes right away, we can undo much of the damage caused over the past decade.

What we can’t do is sit back and watch our growth stagnate for another quarter, and then another.

Because poor South Africans cannot withstand this. Their “real” household income cannot shrink any further – life is already barely affordable.

Now is the time to make some hard choices. Not easy choices like taking on more loans or hiking VAT. Hard choices about the world we want to live in.

And this means choosing either the unity of the ANC or the prosperity of South Africa. We can’t have both.

Thank you.

DA to probe basis and details of Abrahams retirement

The DA has taken note of media reports indicating that former National Director of Public Prosecutions (“NDPP”), Advocate Shaun Abrahams, has retired. It is manifestly clear that this is a way for Advocate Abrahams to avoid the consequences of the damage he has wrought on the institution of the National Prosecuting Authority in the past three years.

The DA will therefore probe the rationale for the decision to grant him retirement, as well as the basis on which his benefits will be determined.

While employed as NDPP, Shaun Abrahams demonstrated that he is a deeply compromised individual with an extremely poor grasp of basic legal principles and that he has no respect for the rule of law. His time at the head of the NPA was marked by political persecutions and a weakening of the institution’s independence, which opened the door for the executive branch of the ANC government to exercise undue influence over prosecutions. He also oversaw an exodus of talented and qualified prosecutors who could no longer serve under his compromised leadership.

Earlier this month, his appointment as NDPP was set aside by the Constitutional Court, which court determined that he was never lawfully appointed.

The DA therefore believe that Advocate Abrahams’ retirement benefits should not be those that would be due to a retiring NDPP, but should instead be that attached to Advocate Abrahams’ last held position, that of a senior state advocate in the Priority Crimes Litigation department.

The DA will also question the rationale for Abrahams’ exit from the NPA being processed as a retirement. Ironically, one of the biggest blunders from Abrahams’ ill-fated stint as NDPP was the persecution of Minister Pravin Gordhan and senior SARS officials, Ivan Pillay and Oupa Magashule, over the alleged unlawful approval of Gordhan’s early retirement.

South Africans deserve a criminal justice system that is independent, just, and effective. The NPA under Abrahams was the exact opposite. His exit is a welcome close to an awful chapter. He will not be missed.

DA welcomes commission of inquiry into SARS

The DA welcomes the announcement by President Cyril Ramaphosa to appoint a Commission of Inquiry into the South African Revenue Service (SARS), to be headed by Judge Robert Nugent with the assistance of Michael Katz, Mabongi Masilo and Vuyo Kahla.

SARS, under the disastrous tenure of ex-Commissioner Tom Moyane, had degenerated from a world class tax collection agency into a ‘captured’ institution beholden to Jacob Zuma and his band of corrupt cadres.

Moyane not only acted at variance with his responsibilities as SARS Commissioner, but also:

• Failed to act against taxpayers who were connected to the Jacob Zuma contingent;
• Consciously failed to ensure full and proper disciplinary processes against certain connected and senior SARS members, such as Jonas Makwakwa;
• Manipulated tax revenue figures;
• Caused enormous damage to the economy and the loss of jobs by delaying the refunds of taxes; and
• Played a predominant role in the revenue shortfall of R 50 billion in 2017/18

The DA urges the Commission of Inquiry to start its work without delay and to work swiftly and diligently to ensure that it produces a comprehensive and productive report.

The DA will monitor the progress of the Commission and will cooperate with it in order to ensure that swift progress can be made.

The appointment of the Commission, soon after Mark Kingon’s elevation to acting Commissioner, are essential steps towards the restoration of sanity at the tax revenue service.

DA welcomes disciplinary charges against Tom Moyane

The DA welcomes the decision taken by President Cyril Ramaphosa to serve former SARS Commissioner, Tom Moyane, with disciplinary charges for alleged misconduct in the discharge of his duties while he was still the head of the tax authority.

This move is long overdue and we are confident that retired Constitutional Court judge, Kate O’Reagen, who has been appointed to preside over the disciplinary hearings, will ensure that the process will be fair and transparent.

Mr Moyane must be held to account for his role in the erosion of institutional governance at SARS and the decline in tax morality due to low public trust in the tax revenue service.

The DA is hopeful that the disciplinary hearings will be the start of a new chapter for SARS as it begins the long and arduous process to be a tax authority that all South Africans can all be proud of.

Early signs of institutional restoration are already evident under the acting SARS Commissioner, Mark Kingon and we hope that he will be given all the necessary support to help refocus SARS to deliver on its core mandate without fear, favour or political interference.

Fringe tax benefits accrued to Zuma should include R1.5m herd of cattle from Supra

The DA has written to the Acting SARS Commissioner, Mark Kingon, to request an update on whether SARS is indeed investigating the liability by former President Jacob Zuma to pay tax on the State-funded fringe benefits that have accrued to him.

This follows reports over the weekend, that North West Premier, Supra Mahumapelo, handed Zuma R1.5 million of prime cattle in 2016, using public funds. If these reports are true, this may be yet another fringe benefit that accrued to Zuma during his disastrous term as president and requires an urgent forensic investigation by SARS.

To this end, the DA has requested that Kingon confirms whether:

  • A full lifestyle audit of Jacob Zuma, as well as a forensic investigation into his tax affairs, have been or will be undertaken;
  • The State-funded Nkandla fringe benefits have been determined in terms of tax laws and precedents, not on the basis of the R 7.8 million payment made by Zuma;
  • Jacob Zuma has paid any taxes due by him on the Nkandla fringe benefits;
  • SARS will investigate any fringe benefits tax payable or other taxable income inferences on the R1.5 million State-funded cattle handed to Zuma; and
  • All other taxable income alleged to have accrued to Zuma, such as the alleged after-tax salary of R1 million per month paid to him by Royal Security, have been included in his taxable income.

It seems clear that Jacob Zuma would not, without a benefactor such as the Guptas, have the means to pay the fringe benefits tax on the upgrades to his Nkandla palace. It is also highly unlikely that the now discredited VBS Mutual Bank, which lent Zuma the R7.8 million he was ordered to pay back to the State for non-security upgrades, would be able to find the R63 million to pay the fringe benefits tax. That said, there is apparently R 900 million missing from VBS Mutual Bank and a payment to Jacob Zuma may well be found to be a part of these “missing” VBS bank funds.

The DA has repeatedly raised the question of the estimated R63 million fringe benefits tax and interest payable by Zuma on the State sponsored upgrades to his palatial Nkandla residence. The President’s Keepers, the book authored by Jacques Pauw, indicated that the DA calculations of fringe benefits tax on Nkandla of R63 million were confirmed by a SARS team.

The now-suspended SARS commissioner, Tom Moyane, persistently refused to even confirm whether or not SARS had taken the Nkandla upgrades into consideration as possible fringe benefits.

The DA trusts that the SARS Commissioner will agree to our request as a matter of urgency and will be able to provide the public with an update on the status of Jacob Zuma’s chequered tax affairs.

Moyane’s disastrous legacy: SARS fails to meet revised revenue target by R700 million

The South Africa Revenue Service’s (SARS) failure to meet its revised revenue target by more than R700 million confirms the dearth of institutional governance at SARS and low taxpayer morality under Tom Moyane’s disastrous tenure as SARS commissioner.

Minister Nhlanhla Nene’s announcement that SARS had collected R1,216.6 trillion against a revised target of R1,217.3, exposes the ‘crisis of confidence’ that had crept into SARS and its ability to effectively manage revenue collection.

Government now has no other option but to close the gap of the R700 million shortfall through increased borrowings as it is unlikely that there will be additional expenditure savings to counter the revenue shortfall for the year ending 31st of March 2018.

The acting SARS Commissioner, Mark Kingon, must be commended for trying to pull a rabbit out of the hat to achieve the revenue of R1, 217.3 trillion that was predicted in the 2017 Medium Term Budget Policy Statement (MTBS).

Minister Nene is faced with the urgent task of restoring sanity at SARS by ensuring that a permanent and effective Commissioner is appointed as a matter of urgency to clean up the mess left by Tom Moyane.