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Sars, the Public Protector and the matter of taxpayer privacy

A constitutional right is the central issue in the battle to have Jacob Zuma’s financial information made public.

There are few things that are as well protected in South Africa as the information taxpayers share with the South African Revenue Service (Sars).

The Public Protector learnt that not even several tweets from former president Jacob Zuma giving up his right to have his financial information safeguarded by Sars would convince it to do so.

The court case between Sars and the Public Protector may shed some light on the right of any other authority – besides the ones specifically mentioned in the Tax Administration Act – to obtain taxpayer information from Sars.

During the course of last year, Public Protector Busisiwe Mkhwebane subpoenaed Sars Commissioner Edward Kieswetter, requesting him to disclose confidential information about Zuma’s tax affairs to her office.

Mkhwebane is investigating a complaint from the Democratic Alliance that Zuma allegedly received R1 million of undeclared money.

However, Sars approached the Pretoria High Court asking that the subpoena be set aside and in November last year the court stayed the subpoena. 

The parties undertook to engage with the court on the “substantial matter” relating to the disclosure of any taxpayer information to third parties.

Joon Chong, a partner at law firm Webber Wentzel, says the Public Protector Act (PPA) does not give Mkhwebane the authority to subpoena the Sars commissioner for taxpayer information.

The PPA stipulates that she may request any person at any level of government, any person performing a public function, or any person who is subject to the jurisdiction of the Public Protector to assist her in the performance of her functions with an investigation.

She may also “direct any person” to submit an affidavit or declaration to give evidence or to produce any document that has a bearing on the Public Protector’s investigation.

Procedure versus protection

This ‘direction’ must be in the form of a subpoena, and that is exactly what Mkhwebane did in the case of her investigation into Zuma. She subpoenaed Kieswetter to hand over the former president’s tax returns.

However, Sars is relying on Chapter 6 of the Tax Administration Act (TAA) – specifically Sections 69 and 70, which deal with the disclosure of taxpayer information.

Section 69 provides for disclosure of information to, among others, the National Prosecuting Authority (NPA) or the South African Police Service in certain circumstances.

Chong says the wording of the Public Protector Act does not override the confidentiality provisions in the TAA. There would have to be an amendment to the former in order to give her the authority to subpoena the commissioner.

According to Chong, the right to have confidential information protected is fundamental to the constitutional right to privacy – whether the taxpayer is an individual or a company.

A matter of trust

“Sars has wide powers to request anything under the sun dating back many years. It would not be in the interest of institutional trust if information that has been provided to Sars – under the umbrella of confidentiality – can then be provided to the Public Protector or another state institution.”

Read: The public protector is inept and has failed the people of SA

Kieswetter said at a press conference at the end of last year that the protection of the right to privacy affects every tax-paying South African and it is therefore pertinent to get clarity on when and in which circumstances third parties may request confidential information from Sars.

Chong, who is also a member of the South African Institute of Tax Professionals’ technical tax committee, gives as an example a case where the NPA is prosecuting an individual for alleged criminal activities and requests confidential information from Sars relating to the tax affairs of the individual.

If this information is provided, it could be a violation of an individual’s right against self-discrimination.

It is a different matter if Sars audits a taxpayer, finds there is reason to prosecute and share its information with the NPA for the purpose of the prosecution.

Chong says “on balance” the need to protect confidential information is far greater than the need to have Zuma’s tax returns made public in the investigation against him.

According to Kieswetter the law was drafted with the clear view that the confidentiality of a taxpayer’s information is an overriding public interest when deciding whether to disclose a matter that may be newsworthy.

At the press conference he stressed that it is in every taxpayer’s interest that Sars obtain legal clarity on whether taxpayers have a right to privacy, which concerns the right to confidentiality of all information – personal and financial – held by the tax authority.

Public participation

Chong says inroads made on the rights of taxpayers to have their financial information safeguarded should be done by way of a legislative amendment.

This will allow for a public participation process where the general public and all stakeholders will have the opportunity to comment on the wording of the statute.

Chong also says the fact that Zuma gave his consent to the Public Protector in a tweet is insufficient.

He should have signed a letter of consent and instructed his tax advisor, if he has one, to hand over his returns and assessments to the Public Protector. Alternatively, if he files his returns himself, he could access both his returns and  his assessments through Sars’s eFiling system and hand them over to Mkhwebane himself.

Read: Zuma again draws on his constitutional rights to avoid justice

 

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For a man who clearly struggle with numbers (one million, six hundred, two hundred, eish), I highly doubt his tax matters will shed any light on on the matter.

Originally, I couldn’t for the life of me, understand why Zuma was so keen to disclose his tax affairs and why the Public Protector, who we all know is a Zuma stooge, went after his tax affairs with such gusto, especially when there was a persistent perception that Zuma’s tax affairs were not in order.

Then I heard the rumour that it was Pravin Gordan himself, who served as the Commissioner of SARS until 2009, who pardoned Zuma back in the day when his tax compliance was first questioned and when they were still big buddies. Apparently, or so the rumour goes, this investigation by Madam Mkwebane is not so much to investigate Zuma, but rather to try to dig up dirt on Gordan, hence Zuma’s support for her application for disclosure. I don’t know if this is true, but then again, nothing surprizes me anymore in this gangster’s paradise formerly know as SA….

Hoo boy, as I see it JZ ain’t fighting to keep them secret, he’s saying open them all up? Why is ANC SARS fighting so desperately to keep them secret? My bet; every ANC elite cadre past and present has been crooking the tax system. Let us see.

So SARS can audit a person and then forward the info to the NPA. That just doesn’t happen to the elite members of the ruling party. What that means is that SARS is merely a means of funneling your money to those whose names crop up daily in clouds of corruption. They are untouchable. That’s how the system is designed.

#Thats how the system was designed, including the best constitution in the world, or one of the best.

Yeah , we’ve heard so much about this great constitution of ours , but with a failing Polce force , Judicial system , etc , to enforce and rule on it , it’s not worth the paper it’s written on!! Anyway the ANC are of a tribal culture , this is new to them and is worthless in their hands!

Why all the paranoia about tax data? Do people have something to hide?

The rest of the year people compete for public displays of success. Their house with the kitch finishes, the Range Rover with darkened windows, the big sunglasses, the bling jewels, the big brand clothes labels, the holidays to Umhlanga and Plett.

Then, where the rubber really meets the road at SARS data, people get all shy and private.

It is quite ironic that the new coronavirus and SARS share the same acronym.

“If this information is provided, it could be a violation of an individual’s right against self-discrimination.” I think that should read self incrimination.

SARS has in the past stuck to the law on disclosure of personal information when it suits them but if it showed what a wonderful job they were supposedly doing then it was of less concern to them.

Seeking Zumas tax returns in the hope of shedding light on his financial frauds is an exercise in stupidity and futility.

First of all he learnt his first mistake many years early receiving i think R240k in a bank transfer from shabir, realising it was traceable. He graduated and joined the big leagues thereafter. Cash and only cash. ZARs for locally domiciled requirements with a natural spillover of $ and Euros. off shore all USD. Does anyone recall his unannounced trip to Dubai a few years ago, very low key, he was not met by his highness in state capacity, only a lowly member of government. The jets whilst he was there took off and landed at a nearby military base and returned. At the same time the Gupta jet was in the country and had made a few trips.

My point is wealth at the Oligarch level is not tracked by any tax office in the world. we are talking billions, banking secrecy has all but disappeared in the west as they hunt for much needed taxes – this is not so much the case in the mid east and Asia. For sure every billionaire and what is visible will declare their taxes like good little citizens but the vast majority of their wealth is held in cash, all over the world and largely untraceable. $1 million in the new notes ($100 notes) i think weighs approx. 13-14kgs. $1 billion would weigh 13 tons. Next time you watch a Hollywood movie where some good guy or bad guy is running down a quayside carrying $200 million of ill gotten gains – he should be from Marvel comics as that would weigh 2.6 tons.

We waste all this time on these enquiries trying to establish where maybe R700 billion to R1 trillion has vanished to over the last decade or so, it is gone and you do not f%#k with people or a system that has much to use or lose. No one mentions the Gadaffi money stored in 7 warehouses allegedly around RSA, when at one stage Obama demanded same from Zuma – controlled by the military, whatever happened to it, was a deal struck, why did the USA shut up so quickly. The point is energy would be far better spent on the future and fixing what we can as fast as we can – we had the arms enquiry, we have had i do not know how many others – they always take a decade and lead to nothing. Any funds that could help the country are likely already in Dubai/ India (i think arguments got heated and cash was relocated billions in physical funds re Zuma. Now Malaysia sits pretty ask Grace and the late Robert. By the time it hits the press and enquiry stage is has moved likely months but probably years earlier. A Bombardier or similar to what the Guptas use can carry around 3 tons of cargo but the hold is too small from a volumetric capacity so usually the back rows of seats are moved to allow them to get closer to their maximum take off weight, so those types of jets can move about with around $1 billion on board – a 737 can carry closer to $2 billion or maybe a little less again depending cargo seating etc – the true work horses in cubic capacity are the C130 Hercules and IL-76s both capable of approaching 3 billion especially the IL 76. Private jets from a perspective of tax collectors are the scourge of their efforts in tax collection legal or not. No where near the same security is employed at private airports, but the private jet section of smaller airports like Lanseria are infamous for what goes in and out, it leaks like a siv. For sure passengers are screened but not if you depart privately i think they assume you will not hijack your own aircraft. Also these aircraft park a couple kms in hangars from their executive departure points, byt the time the passengers get on board the necessary was preloaded at 0300hrs the night before, the arrangements have been made in advance in receiving country.

another point sorry (i am using paragraphs but poor grammar and spelling is my bad genes) – if we have enquiries instead of them focusing on the impossible, why not focus on the elephants very much easier to dig up and very quick, political will prevailing – does anyone remember the shortest serving finance minister in western history Des van Rooyen from Fochville – he was in power for 4 days – the rand hit 17 i think, but no real attention was paid as in what he did in that time with his executive powers – this is my memory only not research i had/ have somewhere – but he signed off approx. 13 – 19 transfers totalling R89 billion from South Africa to Abu Dhabi if my memory serves me correctly – this is where the real elephants reside.

Make a target list and toss to one side all the rubbish, who cares if Zuma can be proven to have not paid tax on R1 million – he is a $$$ billionaire as are a handful of his partners – sorry Motsepe legitimately you are the richest man in RSA, Dangote a little ahead but the Zumas and a few others are in another league.

Why not focus on:

1. The treasury transfer under Des van Rooyen in those couple days
2. The Gadaffi billions
3. Movements massive movements of cash to Waterkloof records will be in the treasury
4. Subpoena pilots and current finance ministers that have access to all this information
5. i could add a few more to this list someone with real information access can dig up more than me am sure

A couple months of intense focus here is worth 3 decades of worthless enquiries, which lets be honest keep Joe Public happy that we are actually going after Zuma, it is a charade, smoke and mirrors to keep the countries minions happy in my opinion.

Dankie

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