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Makwakwa reports: SARS places ball in Parliament's court

Nov 22 2017 12:35
Lameez Omarjee, Fin24

Johannesburg – The South African Revenue Service (SARS) is concerned about the legal implications of releasing reports regarding second-in-command Jonas Makwakwa and has called for Parliament’s Standing Committee of Finance to put together a team that will make a final decision on the matter.

According to a statement issued on Wednesday, the tax authority’s spokesperson Sandile Memela explained that it was not opposed to the release of the two reports. However, legal provisions in the FIC Act prevent it from disclosing personal information of South African citizens

“In fact, SARS has sought legal guidance on this matter. We have been advised that there could be a legal challenge in the event that SARS releases any of the two reports,” he said.  

These reports are based on an internal disciplinary inquiry and an investigation by law firm Hogan Lovells into suspicious payments into Makwakwa’s bank account.

Makwakwa was suspended, with full pay and benefits, in mid-September 2016, following a report by the Financial Intelligence Center (FIC) that he allegedly made "unusual and suspicious" deposits amounting to R1.2m into a number of bank accounts between 2010 and 2016, Fin24 reported.

It was also alleged that more than R450 000 was deposited into his girlfriend, Kelly-Ann Elskie’s bank account.

Makwakwa had been cleared of all wrongdoing and returned to SARS in November. SARS issued a statement indicating that Hogan Lovells recommended disciplinary action be taken against Makwakwa, which Hogan Lovells later revealed was for the non-disclosure of external interests.

In its own statement Hogan Lovells said that it did not investigate the transactions highlighted by FIC.

“The scope of the investigation conducted by Hogan Lovells was limited to identifying whether any misconduct had been committed by Makwakwa and [his partner] Kelly-Ann Elskie as employees of SARS. It did not seek to directly investigate the financial transactions identified by the FIC,” the law firm said. 

SARS has written to the committee chair Yunus Carrim, asking him to put together a four-member team that will engage on the legal implications of disclosing the reports.

The team would include legal representatives from the National Assembly, National Treasury, FIC and SARS. “We are awaiting the outcome of this request and will take guidance from the outcome,” said Memela. 

Following Makwakwa’s return to SARS, the standing committee on finance requested a copy of SARS’ disciplinary inquiry. “Although we have no evidence that Mr Makwakwa and Ms Elskie are guilty of the allegations against them, we still believe that it is in the public interest that the report be released.

"Given the role SARS plays, it not only has to be, but be seen to be above reproach, and perceptions of irregularities by its senior officials have to be effectively addressed,” Carrim said in a statement. 

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sars  |  fic  |  jonas makwakwa  |  yunus carrim


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