Why Sars boss quit – Gordhan

Copy of PN_Oupa Magashule0Oupa Magashule. Photo: Simphiwe Mbokazi

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Johannesburg – South African Revenue Service (Sars) Commissioner Oupa Magashula has resigned following an investigation into allegations of misconduct – developments Finance Minister Pravin Gordhan has described as “regrettable and disappointing”.

“(But) we all understand mistakes happen,” Gordhan said at a media briefing in Pretoria on Friday where Magashula’s resignation was announced.

Magashula resigned following the outcome of a fact-finding inquiry.

In March newspapers carried reports that Magashula was recorded offering a 28-year-old woman a R700 000-a-year chartered accountant job at Sars. The conversation was facilitated by convicted drug dealer Timothy Marimuthu.

Gordhan said these reports raised questions about the integrity of staff recruitment processes at Sars. To protect its integrity and to reassure the South African public and establish the facts relating to the events reported by the media, he appointed retired Constitutional Court Judge Justice Zak Yacoob and advocate Muzi Sikhakhane to set up a committee.

It was mandated to establish whether the event referred to in media reports of March 24 had resulted in any breach of Sars processes or good governance; to report on the nature of any possible discretion by Magashula; to report on the influence Marimuthu is alleged to have had over Magashula; and to advise Gordhan on any appropriate remedies where breaches may have occurred. The committee did not have powers to subpoena witnesses. Gordhan said people gave evidence voluntarily. “This meant all the people who gave evidence, especially those who are named in the report, had to give consent for publication of their evidence”.

He said the committee’s key findings are that Magashula had, by his conduct, placed the reputation and credibility of Sars at risk. The committee reported that he was much less frank than it would have expected of a person whose integrity was essential to his position.

The committee also found Magashula’s actions caused Gordhan to make an incorrect statement to the public with regard to the chartered accountant’s curriculum vitae not having been sent to Sars.

“The allegations of Mr Marimuthu’s influence over Mr Magashula could not be probed because Mr Marimuthu did not respond to a request for an interview,” he said.

According to Gordhan, Magashula was given a copy of the report on Tuesday, and he admitted to him and the deputy finance minister that his actions constituted failure to promote and maintain a high standard of professionalism and ethical behaviour “expected of a Commissioner of Sars”.

Gordhan said he had accepted Magashula’s resignation and had instructed the Audit Committee of Sars to investigate whether his behaviour breached any of the tax and customs processes at Sars.

A committee had also been appointed to review Sars’s governance and ethical standards, “especially as they pertain to the office of the commissioner”.

“The South African Revenue Service is one of the key pillars of our fiscal order, and therefore, our democratic dispensation. It is an institution whose very foundations are built on the trust and credibility with taxpayers,” he said.

Gordhan said Ivan Pillay, deputy commissioner at Sars, has been appointed acting commissioner.

Two opposition parties have welcomed Magashula’s resignation.

“We appreciate that this could not have been an easy decision and applaud Gordhan’s move to ensure that the integrity of the tax authority is protected,” DA MP Tim Harris said.

The DA also welcomed Gordhan’s decision to appoint Pillay but wanted a permanent appointment made as soon as possible.

The IFP also welcomed the decision by the minister.

“It is critical that the institutional integrity of Sars is maintained,” party spokesman Narend Singh said.