At his first press conference after being appointed finance minister for a second time, Pravin Gordhan lashed out at what he called baseless rumours about a “rogue” or “spy” unit within the South African Revenue Service (Sars).
The allegations were published in the Sunday Times over several months and have led to the departure of top Sars officials, including deputy commissioner Ivan Pillay and enforcement head Johann van Loggerenberg. Some of the allegations related to the running of a brothel, using public funds.
Pillay, Van Loggerenberg and Gordhan have reportedly laid complaints against the Sunday Times with the Press Ombudsman. At a recent hearing before the Ombudsman an affidavit by former Sunday Times reporter Pearlie Joubert was handed into evidence. She declared that she resigned from the paper because of moral objections against the reports, which she believed were seriously flawed.
Sunday Times however sticks by its story and the ruling was reserved.
The controversial unit was set up during Gordhan’s tenure as head of Sars.
In a draft forensic report by consultancy KPMG leaked to the media, an investigation into Gordhan was allegedly recommended.
As Sars will now report to Gordhan, he was asked about a possible conflict on interest in this regard.
Earlier during the press briefing Gordhan referred questions about the matter to his deputy, Mcebisi Jonas.
When the KPMG report was mentioned, he however reacted angrily, saying the allegations are based on leaked documents “even I have not seen”. He asked the audience: “So tell me, how would you like to be accused on the basis of documents that have not been put to you, questions that have not been put to you, with no opportunity to say what the facts are.”
He called on journalists to stop reporting on rumours. “Where is this mysterious report?” he asked.
“KPMG has the cheek to say, from what I’ve read, he (Gordhan) doesn’t know about it, but he should have known. I thought forensic people are supposed to come up with facts. What does this say about the reputation of KPMG?” he asked, giving the floor to Jonas.
Jonas said a lot of progress has been made with an in-depth look into what he called the ‘investigative unit’ and the development of a new framework for it. “Our focus is on stabilising Sars,” he said. He said the KPMG report is still in draft format and the process of responding to the structure and content of the report has not yet been finalised. Only when this is done, will a final report be presented for Sars, which is the client, to sign off.
He added that the investigation is designed to look at the institutional capacity at Sars and ways to strengthen it.
Gordhan then added that it was a huge task to build Sars as an institution. He said the process began in 2000, when there was a culture of tax evasion stemming from the late 90s.
In a complete turnaround, Sars was converted into an institution conferred with public confidence and a culture of compliance was developed. “We are in a position to pay social grants, thanks to the fiscal space created by economic growth and tax compliance.”
He said South Africans should be worried when a crucial institution dealing with tax revenue is damaged reputationally and institutionally. It is important to build state institutions like Sars, the Reserve Bank and National Treasury, he said.
“Don’t play with state institutions. At the end of the day it is not the current generation that suffers, but generations to come,” he said. “We should all collectively defend these institutions.”