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Johannesburg – Judge Dennis Davis is no longer fit to serve on the specialist tax committee, said the South African Revenue Service (SARS).
This is according to a statement issued by SARS on Friday. SARS outlined its disappointment in Davis’ “attack” on the tax authority, when he addressed a conference on tax evasion and illicit financial flows held earlier this week.
Davis was reported as saying that the integrity of SARS is being eroded, and that it did not have the capacity to deal with tax evasion by multinational corporates, among other things.
READ: Davis puzzled by low corporate taxes
City Press recently reported Davis as saying that SARS was at risk of imploding and that the drop in personal income tax collections was a red flag.
“In his address, Judge Davis unashamedly misled the South African public and purported to undermine public confidence into SARS,” the Revenue Service said.
In the statement, SARS said that Davis was part of a “systematically orchestrated narrative” seeking to undermine SARS leadership which would result in a lack of public confidence in the tax authority.
“Judge Davis has for some time now behaved in a manner that could be perceived as advocating a veiled strategy to mobilise a possibility of a tax revolt by taxpayers against the state,” said SARS.
SARS suggested that Davis’ statements had led to the break down in his relationship with the organisation. Davis violated the SARS Act, in which he conflicted his responsibility as adviser to SARS commissioner Tom Moyane, SARS explained.
“SARS has lost all confidence and respect for Judge Davis,” said SARS. The organisation further stated that Davis is no longer fit, independent or proper to lead and serve on the tax committee.
SARS plans to engage with Finance Minister Pravin Gordhan to have Davis’ membership to the committee terminated. Alternatively, Davis should recuse himself from the position, said SARS.
The organisation is also looking to lodge a complaint with the Judicial Service Commission over Davis’ conduct, which it said misled the public. A letter expressing SARS' discontent and its intentions has been sent to Davis, said the organisation.
SARS reiterated that the decline in tax revenue collection was due to economic factors, and not because of the organisation’s capacity. It pointed out that customs duties had come down R6.5bn as a result of reduced imports. VAT was also impacted by a drop in imports, and collections were down R11.3bn.
Personal income tax under-performed by R15.2bn, mainly due to lower wage settlements, contained bonus payments and job shedding, said SARS.
Moyane had previously used these reasons to explain the R30bn shortfall in revenue at a briefing held in February.
READ: Moyane admits: My relationship with Gordhan is strained
He was responding to statements made by Gordhan over revenue collection concerns. At the briefing Moyane defended the organisation’s capabilities as well as the expertise of his staff.
