Taxman wants Dennis Davis

The South African Revenue Service (Sars) wants Judge Dennis Davis removed from the Davis Tax Committee and is considering a complaint against him at the Judicial Services Commission.

This follows a City Press article last week that quoted Davis criticising the integrity and capabilities of Sars at an event in Cape Town.

In its statement, Sars accuses Davis of “allow[ing] himself to be used as a proxy in a recent campaign being waged against Sars and its leadership”.

The statement announces the “intention” to ask Finance Minister Pravin Gordhan to act against Davis.

Davis must recuse himself or his services should be terminated, said Sars.

Sars also said that it was “seeking legal opinion on the prospect” of a complaint at the Judicial Service Commission.

Davis Tax Committee member Deborah Tickle said it was a pity that things were becoming a brawl in the media.

Davis’ job as chairperson of the Davis Tax Committee had been laid down by Gordhan and the committee was tasked with looking at a number of tax-related issues.

This included a look at tax administration and was “not sinister in any way”, she said.

Tickle said that Davis had the best interests of government, Sars and the taxpayer at heart and he, together with the committee, was there to create good tax policy.

According to the Sars Act, only the finance minister can remove a member of a tax committee, further complicating the already fraught relationship between Gordhan and Sars commissioner Tom Moyane.

According to Sars spokesperson Luther Lebelo, the fact that the relationship of trust between Davis and Sars was now broken was enough grounds for Davis to be removed.

“He was appointed by the finance minister as well as Sars. He is attacking the institution that appointed him ... We employed him,” said Lebelo by phone.

As of Friday afternoon, Sars had only written to Davis himself, said Lebelo.

The formal letter to Gordhan would likely follow by Monday [tomorrow], he said.

In its statement, Sars accuses Davis of having “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”.

Lebelo says this is a reference to Davis’ comments during a speech at the University of the Witwatersrand in 2015 when he said corruption could lead to a tax revolt by disgruntled taxpayers.

Sars makes a number of other allegations.

They call Davis “part of a systematically orchestrated narrative that primarily seeks to decimate and undermine the leadership of Sars in order to engulf Sars into a crisis of lack of public confidence and illegitimacy”.

They also say that Davis’ behaviour “leaves Sars with no option but to conclude that Judge Davis’ motive is to destabilise Sars and to cast doubt, particularly to its leadership”.

Legally, Sars seems to be accusing Davis of violating section 12(4)a of the Sars Act, which is cited in Friday’s statement.

This section regulates members of special committees such as the Davis Tax Committee and is the basis on which the minister of finance can remove a member of a tax committee.

The section Sars is quoting says that members of such a committee “must not ... expose themselves to any situation in which the risk of a conflict between their responsibilities and private interests may arise”.

It is unclear how Davis has a conflict involving his “private interests”, but Sars says his conflict is with his “responsibility to advise commissioner Tom Moyane on tax administration matters”.

The section of the Sars Act also says that a member of a committee “must be a fit and proper person, have appropriate expertise ... and have the ability to perform effectively as a member of that committee”.

Davis’ committee has been conducting a sweeping review of South Africa’s tax system and is currently studying corporate income taxation.

Its mandate, however, also covers governance at Sars.

Last week, City Press reported on a presentation by Davis at a tax avoidance seminar hosted in Cape Town by nongovernmental organisation the Alternative Information and Development Centre.

Sars is seemingly basing its actions entirely on City Press’ report of last week.

City Press attempted to reach Davis, but print deadlines did not give him enough time to comment.