NEWS & ANALYSIS

SARS 'rogue unit': Move to remove advocate from tax board list

Mark Kingon allegedly instructed Zolani Moloi to ditch Rudolf Mastenbroek but was rebuffed

SARS 'rogue unit': Move to remove advocate from tax board list

1 October 2018

Acting SARS commissioner Mark Kingon had apparently recommended that an advocate - who had been part of an advisory committee endorsing the existence of a rogue unit at the revenue service - should be removed from the list of candidates for Tax Board Chairpersons.

News24 has seen an email, apparently written by Kingon on August 23 and addressed to Zolani Moloi from the legal department.

In it, Moloi is instructed to remove advocate Rudolf Mastenbroek's name from the list recommended to Finance Minister Nhlanhla Nene.

But insiders say the legal team refused to remove the name.

Mastenbroek had applied to be part of the panel of Tax Board Chairpersons after the tax body issued a public notice inviting lawyers who were interested to apply.

The notice stated that applications should be submitted to SARS no later than March 16, 2018.

The chairpersons are appointed by the finance minister to attend tax appeal hearings for a period of five years.

In the email, Kingon said: "My reason for the decision is that, as commissioner, I must protect the reputation of SARS, and agreeing that I recommend to approve him will bring SARS into disrepute."

Mastenbroek has previously made headlines for allegedly being the source for the Sunday Times' investigative stories into the so-called "rogue unit".

'Unethical and immoral'

An affidavit by former Sunday Times journalist Pearlie Joubert claimed that Mastenbroek had tried to give her information to be published in the paper which would have implicated former SARS officials Ivan Pillay and Johann Van Loggerenberg in the rogue unit saga.

He sought to implicate them in having been involved in protecting the ANC and certain high profile members, Joubert said.

Joubert, who described Mastenbroek as a close friend, said he had approached her in April 2013.

The affidavit was read out in a Press Ombudsman hearing in 2015 in a bid to discredit the newspaper's reports on the so-called "rogue unit".

Joubert also claimed that she had resigned from the newspaper in February 2015 because she was not "willing to be party to practices at the Sunday Times which I verily believed to have been unethical and immoral".

"I was aware that in advocate Mastenbroek doing so, he contravened his oath of secrecy as [a] former SARS official, as well as the relevant confidentiality clauses contained in tax legislation," Joubert said in her affidavit.

The Kroon advisory committee, of which Mastenbroek was part, was set up by Nene during his tenure as finance minister to attend to governance matters at SARS.

The committee, which was headed by retired Judge Frank Kroon, endorsed the findings of the Sikhakhane report, headed by advocate Muzi Sikhakhane, which found that the establishment of the intelligence unit within the revenue service was illegal.

'No political motivation or intent to mislead'

Now-suspended commissioner Tom Moyane during his tenure at the helm of the tax body initiated an investigation by KPMG.

The report KPMG produced suggested that the unit was breaking the law by using illegal methods, and was therefore "rogue in nature".

However, in September 2017, KPMG retracted parts of its report into the SARS unit, after an investigation by KPMG International into the South African unit.

"KPMG South Africa had no political motivation or intent to mislead. The partner responsible for the report is no longer with the firm," it said in a statement at the time.

It also said it recognised and regretted the impact of its report.

In the email seen by News24, Kingon listed reasons why Mastenbroek should be removed from the list, saying there was evidence that he engaged auditing firm KPMG in the process of their investigation.

"It would appear that he sought to direct where the investigations of KPMG should focus. He was, according to minutes in my possession, given extensive data and information of the investigation," he said.

"While there is no direct evidence, there are allegations that some of the publications regarding the KPMG may have come via him."

The acting commissioner then appeared to instruct Moloi to return the letter to him for resubmission, with the name deleted.

News24 understands that this was prior to submitting the list to the minister.

'Contaminated the whole process'

SARS insiders have told News24 that all processes were duly adhered to, saying that the acting commissioner had "interfered with the process".

"His interference has contaminated the whole process and the candidate has been unfairly prejudiced by his abuse of power," said the source.

Asked for comment on the matter, the revenue service told News24 that the acting commissioner had not removed anyone from the approved gazetted panel.

"The commissioner has no authority to remove a name from the approved gazetted panel, and has not done so," said a spokesperson.

The spokesperson said the appointment of Tax Board Chairpersons was made by the minister, in consultation with the judge presidents of the high courts within which the tax boards sit.

SARS then facilitates this consultation and engages with the necessary parties. The revenue service received applications from across all provincial jurisdictions. These consultations were held and "confirmations were received from the regulatory bodies of both the attorneys' and advocates' professions".

SARS said that, after the application process and consultations, the commissioner makes proposals to the minister:

In compiling the members of the panel for consideration by the minister, the commissioner attempts to ensure that the persons:

- Are in good standing;

- Have appropriate experience;

- Are representative of race, gender and the advocate/attorney fraternity;

- Represent the values and principles governing public administration as set out in Section 195 of the Constitution and affirmed in section 4 of the SARS Act.

'No merit in the complaint'

Insiders say the legal team, declining to remove the name, warned Kingon that doing so would "raise legal challenges as the candidate had met all the statutory legal requirements to be appointed and that the judge president had even approved the list of the recommended candidates for approval by the minister".

Meanwhile, Mastenbroek has told News24 that he has done nothing "unlawful or unethical".

He said, following an anonymous complaint two years ago to the Johannesburg Bar Council regarding his role on a ministerial-appointed committee, his name was cleared.

"The complaint dealt with the exact same subject matter that appears to have bothered the acting commissioner.

"The Bar Council found no merit in the complaint. I have always been, and continue to be, a member of the Johannesburg Bar in good standing.

"All my engagements with KPMG were done on the instruction of the chair of the committee, retired Judge Kroon," he said.

He said he applied to be part of the panel following an explicit invitation earlier this year by SARS to members of the Johannesburg Bar with the required tax expertise.

"In the premises, if what you report is true, I have indeed been prejudiced. However, trust the minister will not be swayed by irrelevant considerations."

News24