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Moyane admits: My relationship with Gordhan is strained

Pretoria – South African Revenue Services (SARS) commissioner Tom Moyane says his relationship with Finance Minister Pravin Gordhan has not been cordial but strained.

SARS called a media briefing on Friday to respond to reports in the Mail & Guardian of a series of 16 confidential letters between Gordhan and Moyane leading up to the Budget Speech delivered on Wednesday.

The letters reveal the state of the relationship between Moyane and Gordhan, and how Moyane turned to President Jacob Zuma for intervention on four separate occasions, Mail & Guardian reported.

During the briefing Moyane clarified that letters were not leaked by SARS, but said a State Security Agency finding indicated it could have come from Treasury. "(The) leakages did not come from my institution... I have no sleepless nights about people peddling info on their own organisation," he said.

Referring to Gordhan's speech, Moyane said that "utterances" by a person as senior as the finance minister pose "serious challenges to the credibility and effectiveness of SARS as an institution". 

At a briefing to the MPs of Parliament’s finance committee held earlier this week, Gordhan said that his role requires him to ensure the SARS commissioner (Moyane) is doing what he is supposed to. “It’s not between Gordhan and Moyane. He is the head of a fiscal institution and my job is to see if he’s doing what he’s supposed to do. SARS is the revenue administrator and it must do its work in a manner to support government’s fiscal objectives,” said Gordhan.

“I’m only doing my job and hopefully they’ll begin to do their jobs as well,” he added.

READ: Don't personalise Treasury/SARS issue – Gordhan

In his speech Gordhan had expressed concerns over revenue collection. “SARS must continue to develop the skills and capacity needed to enforce legislation and strengthen its efforts to curb tax avoidance and evasion,” he said.

Gordhan said it was important for the country’s fiscal health to strengthen SARS’ capacity and enhance its relationship with taxpayers. He also said he has been meeting regularly with SARS’ top management about the skills capability and stability in the institutions. “There will be more meetings in the next few weeks.”

ALSO READ: Gordhan climbs into SARS top management

At a post-budget breakfast hosted by PwC on Friday, which Gordhan was supposed to attend, indirect tax partner Lesley O’Connell said there is a capacity shortage at SARS now that senior people have left. “It has made an impact as institutional knowledge has left … The skill set is not what it used to be.”

However, at the briefing Moyane said there was no "leadership challenge" at SARS and that his team had "earned their stripes" in different areas of competencies. "I have an open door policy for staff to raise their issues," he said.                  

Moyane said that the disintegration in the relationship between SARS and Treasury is a result of Gordhan's delay in appointing senior officials at SARS, his constant interference in operations at the tax authority and an inability to resolve personality differences.

"In meetings the minister treats me as a nonentity," said Moyane. "I request cordiality and mutual respect from the minister," he added. Moyane also said that he is prepared to meet with Gordhan to "thrash out" their differences.

Moyane indicated that the R30bn deficit referred to by Gordhan in his speech was not due to collection inefficiencies by SARS, but rather customs duties being down by R6.5bn, VAT dragged down further by import VAT collection by R11.3bn in underperformance as well personal income tax underperforming by R15.2bn. 

This underperformance largely stems from lower economic growth, explained Moyane. 

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