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Pretoria - The SA Revenue Service (Sars) said it has taken note of an article in the Mail & Guardian claiming that “Sars chief Tom Moyane's nephew is linked to R220m tax debt collection contract”.
It relates to the appointment of Lekgotla Trifecta Consortium (LTC) following an open tender process.
"We wish to categorically state that the report contains factual inaccuracies and untruths. Sars thus wishes to set the record straight by presenting the correct chronology of events," Sars said.
Sars said it issued an open tender (RFP 28/2015) for the establishment of a panel of debt collection service providers. Eleven service providers made it onto the panel, where after they were invited to submit proposals for the six month pilot project. LTC with another two service providers, was subsequently appointed to collect outstanding tax debt older than four years for this pilot project.
"The allegation that LTC’s fee 'could be about 10% or up to R220m' is malicious and untrue. Each of the three service providers for the pilot project were given R2.2bn debt to collect with an agreed commission of a mere 3.88% plus VAT of actual debt collected by them," said Sars.
On August 18 2016, Sars claimed it received a media query on the relationship between Moyane and Nhlamulo Ndhlela, who is a shareholder in LTC.
"Sars was not aware of the relationship and instituted an investigation into the tender award. The Sars investigation revealed that LTC failed to disclose the relationship between one of its shareholders, Nhlamulo Ndhlela, and the commissioner on the required National Treasury mandatory declaration of interest form, despite the form specifically requesting such disclosure," said Sars.
"Upon the matter being brought to the attention of the Commissioner, he immediately instructed to initiate the process to cancel the award to LTC with immediate effect."
Sars said it sent a letter to LTC on August 22 2016, in which they were requested to indicate why they did not disclose the relationship between Ndhlela and the Commissioner. On August 25 2016, Sars received a response from LTC in which they stated that, according to legal advice obtained by them, they were not required to disclose the relationship.
This was despite the mandatory requirement as contained in the form.
"This clearly demonstrates an indisputable fact that LTC knew of their legislative and procedural requirement to disclose this relationship," said Sars in its statement.
Sars said it subsequently obtained a formal legal opinion from counsel on 12 September 2016 and a further letter was sent to LTC on 16 September 2016, in which they were requested to make formal representations regarding their failure to disclose the above-mentioned relationship.
After receiving LTC’s representations on October 10 2016, Sars decided that it is not persuaded by LTC’s submissions.
"Sars has written to LTC to give them an opportunity until Monday, 17 October 2016 to terminate the contract by mutual consent, failing which Sars will commence with an urgent application to the High Court for the review and setting aside of the tender to LTC," said Sars.
"Sars places on record that as a result of the deliberate non-disclosure by LTC, when the tender was awarded, its Commissioner was not aware that his nephew was a shareholder in LTC."
Sars said its position is that as a result of LTC’s material and deliberate non-disclosure, the LTC award is fatally defective and therefore requires to be set aside in terms of a legal process, which is underway.
"Sars assures the South African public in executing its mandate, it is committed to a transparent and accountable process and compliance with the Constitutional principles of fairness, cost-effectiveness and equity in its procurement process," said Sars.
