Johannesburg - Letters between Finance Minister Pravin Gordhan and South African Revenue Service (SARS) commissioner Tom Moyane indicate an acrimonious relationship between the two officials, according to a lead story published in the Mail & Guardian.
The newspaper on Friday reported that it had seen a series of 16 letters between Gordhan and Moyane from April 1 2016 to February 2 2017 that indicate a sour relationship between the two.
The publishing of the letters comes amid the surprise revelation in the Budget Speech this week that SARS has suffered a R30.4bn revenue shortfall.
And in one of the letters written by Moyane, the SARS commissioner accuses Gordhan of “belittling, humiliating, denigrating, antagonising and disparaging my [Moyane’s] persona”.
“I ask myself every day what have I ever done to you that has made you mistreat and besiege me as if I am a little boy,” the newspaper reported Moyane as saying.
In other letters, Moyane further accused Gordhan of usurping Moyane’s authority and “systematically orchestrating a vigorous campaign to denigrate” the commissioner.
Moyane then reached out to President Jacob Zuma to intervene in the disputes.
The letters further indicate that Gordhan has accused Moyane of contravening the Public Finance Management Act and the SARS Act by increasing salaries and paying out bonuses without authorisation from the minister of finance.
Gordhan is further said to have given Moyane a dressing down at a meeting leading up to this year’s Budget Speech, with Moyane having skipped a number of meetings leading up to the address.
When contacted by Fin24 for comment, SARS spokesperson Sandile Memela said that the revenue collection service would hold a press briefing on Friday to address the report.
Treasury officials were not immediately available for comment.
History of tense relations
Meanwhile, the publishing of some of the contents of the letters in the Mail & Guardian comes amid a backdrop of tense relations between Gordhan and Moyane.
READ: Moyane: Ask Hawks if Gordhan should be probed
Moyane reportedly laid a criminal complaint against Gordhan with the Hawks in 2015 over a so-called spy rogue unit.
National Prosecuting Authority (NPA) head Shaun Abrahams last year also announced that investigators had decided to prosecute Gordhan over fraud charges related to the retirement package of
Ivan Pillay, a former SARS executive.
But Abrahams later in the year reversed the decision, sparking criticism that the NPA had become a pawn in a political game.
Last year, Fin24 reported that relations between Moyane and Gordhan have further been strained as Moyane has been accused of purging SARS executives who helped Gordhan transform SARS into a respected institution.
Speaking to the media after his Budget Speech, Gordhan adopted a conciliatory approach.
“We are currently having new engagements with senior management of SARS,” he said, adding however that he is concerned “about the shape of revenue collection” in South Africa. “That’s why we are having these engagements. Will speak about that once it is concluded.”
Gordhan, who spent a decade building SARS into an internationally-renowned tax collection unit, said “it can take many years to build a solid institution and it takes a very short time to mess it up”.
“Overnight, a man can come and dismantle this,” he said. “This is where society comes in – they need to be aware of sustaining good institutions, as they are the centrepiece of any democracy.”
He warned media that institutions like Treasury and SARS should not be tampered with for political reasons.
READ: Gordhan aims to soothe tensions with SARS
Since Moyane took over as commissioner, many key executives with institutional knowledge have left the institution.
Tax revenue shortfall
Fin24 earlier this week reported that this year's tax revenue shortfall is the largest in eight years. Projections have fallen short in three of the four main tax instruments.
READ: Taxpayers foot bill for largest revenue shortfall in 8 years
Wednesday's budget confirmed the largest revenue shortfall relative to budgeted estimates since 2009/10, necessitating tax hikes bringing in an additional R28bn, Fin24 reported.
The tax proposals increase the tax burden from 26% of gross domestic product in 2016/17 to 26.7%. The tax-free threshold will go up from R75 000 to R75 750.
The October 2016 mini budget already noted that revenue collection would fall well below estimates. According to the Budget Review, the 2016 Budget estimated government would receive total tax revenue of R1.175trn during 2016/17. The mini budget projected a revenue shortfall of R22.8bn, which is now revised to R30.4bn, meaning an estimated R1.144trn will be collected.