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Gordhan Orders SARS Ethics Review

17 July 2013   (0 Comments)
Posted by: Author: Amanda Visser
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Author: Amanda Visser (Businessday)

Ethical standards pertaining to the office of the commissioner of the South African Revenue Service (SARS) are to be reviewed in a move that seeks to control the damage caused by the scandal surrounding former incumbent Oupa Magashula.

Mr Magashula resigned on Friday after a damning report by the Yacoob inquiry into allegations of improper conduct.

The committee, appointed by Finance Minister Pravin Gordhan in April, found that Mr Magashula’s conduct required sanction. In addition, it decided that if he did not accept the committee’s findings, formal disciplinary proceedings would be instituted.

Mr Gordhan said SARS was one of the critical pillars of South Africa’s fiscal order. It was therefore important that those to whom the stewardship of the service was entrusted did it in a manner that was beyond question.

He had instructed SARS’s audit committee to probe whether the commissioner’s conduct breached any of the tax and customs processes at the institution.

This was despite the committee not finding any evidence of criminal conduct.

South African Institute of Tax Practitioners CEO Stiaan Klue welcomed Mr Gordhan’s invitation to the public to participate in the review of the code of conduct and ethics and to recommend improvements.

"This is a good sign for our democracy and offers the opportunity to restore the integrity of such an important institution," he said.

SARS is recognised internationally and in Africa as one of the most advanced and sophisticated revenue authorities, Mr Klue said. The commissioner of SARS is seen as the "revenue ambassador in Africa". Therefore, SARS could not afford any risks to its reputation.

Retired judge Zak Yacoob and Muzi Sikhakhane, advocate of the high court, said in their report a loss of credibility for the revenue authority would have a direct effect on taxpayers’ behaviour and their honesty when paying their taxes.

"It is not far-fetched to say that the kind of conduct we are talking about here, if pardoned or remains unchecked, could result in considerable loss of revenue.

"It is vital that, in addition to appropriate action against the commissioner, every conceivable step is taken to make sure that all officials, especially senior officials, conduct themselves with the required integrity and purpose. We see the consequences of not doing so as dire ."

The allegations that led to Mr Magashula’s downfall was first reported in City Press in March. Mr Magashula’s conversation in which he offered a young chartered accountant, Nosipho Mba, a job and asked her to send him her CV was recorded.

According to the newspaper report, the woman was a friend of Panganathan "Timmy" Marimuthu, a wealthy businessman convicted of drug dealing about 15 years ago.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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