Nkandla: SARS confirms action on Zuma taxes; Zuma letter to Speaker undermines Public Protector's Office

Note to editors: This is the press statement that was distributed at the press conference hosted by the DA Parliamentary Leader, Lindiwe Mazibuko MP, DA Caucus Chairperson, Dr Wilmot James MP and DA Shadow Minister of Finance, Tim Harris MP in response to President Jacob Zuma's full letter to Parliament, as well as the announcement made regarding our request for a SARS investigation into President Zuma's taxes owed for the Nkandla upgrade.

Zuma's full letter to the Speaker of the National Assembly undermines the Public Protector:

The DA notes with deep concern the full text of the letter sent by President Zuma to the Speaker of the National Assembly, Max Sisulu, which has now been included in Parliament's Announcements, Tablings and Committees (ATC) document.

In his letter, the President specifically notes that he has yet "to encounter such an anomaly" in his time in government between the findings of the Public Protector's report and the Public Works Task Team Report into the Nkandla scandal.

In this response, the President seems to be attempting to cook up a narrative about the validity of the findings of the Public Protector Report, and using the SIU investigation as a ‘king-maker finding' to break an invented deadlock between the two reports on the matter.

This is plainly and simply wrong because the Public Works Task Team Report is a shameless government whitewash, which should not be treated as anything more than a poor attempt at a cover-up.

The Task Team Report is a document produced by ANC ministers who report to President Zuma. It is only 36 pages long. It did not properly consider the role of the President in this scandal despite clear evidence of his involvement, and it was more concerned with ‘price inflation' by Nkandla contractors than it was with establishing who authorised the spending of R240million on the president's house in the first place. 

In fact, in a replying affidavit to the DA's application to gain access to the full Task Team Report last year - which was at the time unlawfully classified - the Department of Public Works admitted that there were no security details that formed part of the report. Public Works Minister, Thulas Nxesi lied to Parliament on numerous occasions, claiming the report contained "security sensitive information". It was written with one end in mind: to clear President Zuma of wrong doing.

This shameless approach to the Public Protector confirms the sentiment expressed by the President in his response to the Public Protector's preliminary report on 14 February 2014 where he said that her investigation was "tainted by lack of proper procedure" and claimed that it did not apply "the rules of natural justice."

He went onto say that at, "no stage have I been appraised of the fact that my conduct forms part of any investigation either by the Public Protector or any other institution and my statement is framed in the light of this appreciation." He also slammed the Public Protector's investigation as lacking "integrity as this has been compromised by several leaks."

The reality is that President Zuma is trying to run away from accountability and delay having to explain his actions to South Africa until after the elections on 7th May 2014.

He knows that he does not need to wait for the SIU report to table a full response on the Public Protector's report. Indeed, why should he wait a second longer to repay the money he owes South Africa? It can only be that he expects the findings of the SIU to be different.

The DA will not let the President undermine the Office of the Public Protector, or escape accountability. He owes South Africa a full explanation and Parliament must now use its powers to ensure that this happens.

That is why the DA will seek a legal opinion on whether we can force the President to abide by the recommendations of the Public Protector. We will ask that this include whether the President's letter, which essentially constitutes a non-response, is a violation of the Executive Members' Ethics Act.

The DA will also continue to push unrelentingly for the Speaker to press ahead with impeachment proceedings against the President.  

This latest treatment of the Public Protector is further confirmation that the President does not take the constitutional imperative to assist the Public Protector's office seriously, and should be impeached for violating section 181 of the Constitution - which enjoins him to assist Chapter Nine institutions.   

Given that the President has now ‘responded' to the report - there is absolutely no reason for the Speaker to delay establishing an ad hoc committee any longer. We now urge him to make an announcement, and soon. 

SARS confirms Zuma's Nkandla Tax issue "will be dealt with":

The DA can also reveal that we received a letter this morning from the SARS Commissioner, Mr Pillay, noting that they will deal our request to look into President Zuma's Nkandla tax issue in the course of the "normal duties and functions assigned to SARS for the purpose of the administration of the tax laws".

This is the clearest indication yet that SARS will not treat the President any differently to how they would treat any other South African, and will therefore accordingly pursue our request.

DA Shadow Minister of Finance, Tim Harris, reported the matter to the SARS Commissioner, after calculating that President could owe around R16.8 million for the fringe benefits he received from the R246 million spent on his private home in Nkandla.

While the Public Protector does not explicitly state how much President Zuma owes for all the non-security items, the DA has studied her report, as well as other documents released by the media, and calculated  - extremely conservatively - that non-security upgrades to his private property could have been worth around R52.8 million; way beyond the R10.6 million the Department of Public Works appears to have allocated to the President's "private account".

In a related reply to an oral question in February Minister Pravin Gordhan has stated: 

"All South Africans pay tax on their income and fringe benefits, be (sic) the person the President or an ordinary worker. South Africa is one of the few democracies where we are all equal when it comes to taxation, in that we are all taxed, with the exact amount determined by our income and fringe benefits, minus any allowed exemptions and deductions."

According to sections 2(a) read with 5(1) of the Seventh Schedule of the Income Tax Act, 58 of 1962, which sets out the benefits or advantages derived by reason of employment or the holding of any office, President Zuma may owe tax on the fringe benefits of the upgrades.

In determining Zuma's tax liability the value of the benefit would be added to his annual salary of R2.6 million. We believe the President should repay the full amount spent for his private benefit, but even if he only pays the R10.6 million specified by Public Works, the excess - as a fringe benefit - may trigger a liability of R16.8 million in tax payable. 

We welcome that news that SARS will not treat the President any differently to any other South African in looking into this matter.

The President must pay the tax he owes. We are committed to ensuring that this happens. 

Statement issued by Lindiwe Mazibuko MP, Parliamentary Leader of the Democratic Alliance, April 3 2014

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