Cape Town - Sars has launched an investigation into the income tax affairs of Public Protector Busisiwe Mkhwebane, dating back to 2011.
Sars has ordered her to hand over copies of all relevant material including financial information, employment income, foreign income, business income, expenses, deductions and other income.
Mkhwebane’s spokesperson, Oupa Segalwe, on Saturday said the public protector believed Sars’s move was an indication she was being “lynched” as part of “concerted efforts to instil fear in
her following some investigations of hers”.
He added Mkhwebane had refused to give the Hawks a statement because they are “abusing resources on frivolous cases”.
This comes just over a month after the Hawks moved on Mkhwebane, requesting a warning statement related to a case of alleged perjury and defeating the ends of justice laid against her by advocate Paul Hoffman in August.
Hoffman, of NGO Accountability Now, had laid criminal charges against Mkhwebane after the Constitutional Court upheld an order for her to pay costs from her own pocket.
The country’s apex court had found Mkhwebane acted in bad faith during her probe into the apartheid-era loan to Bankorp, now part of Absa, by the South African Reserve Bank.
Hoffman had also asked the Legal Practice Council (LPC) to consider striking her from the roll of advocates.
Pressure on Mkhwebane was added this week when Speaker of Parliament Thandi Modise approved a motion to initiate proceedings for her removal.
In a letter co-signed by executive for investigative audits Charles Makola and senior manager for investigative audits Matimba Macebele, Sars demanded bank statements for all local and foreign accounts.
In addition, the revenue collector demanded copies of a statement of assets and liabilities, a fixed assets register, a detailed breakdown of vested shares and incentive scheme, and copies of short and long-term insurance contracts, among others, within 21 days.
“You are required to provide copies of the relevant material indicated below in relation to the tax periods under audit within 21 business days from the date of this letter. Please retain the originals for your records,” read part of the
letter.
“A field audit may be conducted at your premises and Sars will notify you accordingly. Electronically stored data can be submitted by arrangement with the Sars official.”
Sars ordered her to surrender copies of payslips, employment contracts, IRP5 certificates and investment income certificates for the period under audit.
She was also instructed to provide copies of the following:
- Employment contract on which foreign income was received;
- Passport(s);
- Schedule of days outside South Africa in respect of foreign income;
- Gambling income, including horseracing;
- Detailed financial statements and all supporting calculations for trade profits and loss, including farming;
- Rental contracts;
- Indications if any event occurred during the tax period(s) mentioned above which could constitute a disposal such as transfer, donation or loss of asset;
- Sale agreement/invoice to confirm the proceeds for all assets disposed of;
- Pension fund and retirement annuity contributions certificate;
- Bond statement(s) in respect of property rented out;
- Detailed travel log book indicating the business and private travel including the opening and closing odometer readings;
- Copies of invoices for repairs and maintenance on motor vehicle(s);
- Schedule of medical expenses not recovered from the medical aid scheme with supporting invoices and proof of payment;
- Detailed calculation of all expenses claimed;
- Detailed breakdown of travel expenses claimed; and detailed calculation of home office expenses claimed, including the size of the home office in relation to the size of the building.
Sars reminded Mkhwebane it could “request relevant material from any person who maintains or keeps such material” in respect of the taxpayer, including financial institutions and insurance companies, in terms of Section 46 of the Tax Administration Act No 28 of 2011.
It warned her: “It is a criminal offence to wilfully and without just cause fail to provide the relevant material”.
Segalwe said Sars’s action was part of a “fight-back campaign”.
“She has been given until February 19, 2020 to respond (21 days). She will co-operate and has absolutely nothing to hide.”
On the Hawks’ request for a warning statement, Segalwe said: “She believes the Hawks are abusing resources on frivolous cases instead of dealing with investigating priority crime. She will not make the statement and has informed them (Hawks) accordingly.”
Mkhwebane has investigated sensitive cases and made adverse findings against senior politicians including President Cyril Ramaphosa and Public Enterprises Minister Pravin Gordhan.
In various reports released last year, she found Ramaphosa had misled parliament over a R500 000 Bosasa donation from its disgraced former boss Gavin Watson. She also found the president had failed to declare a R1billion donation towards his ANC presidential election campaign ahead of the party’s Nasrec conference in 2017.
Mkhwebane made adverse findings against Gordhan in the pension fund matter involving former Sars deputy commissioner Ivan Pillay and an alleged “rogue unit”. Gordhan has since taken the rogue unit report on review, dismissing it as “dishonest and reckless”. He did not launch a review application against the Pillay pension fund report.