Finance Minister Tito Mboweni
Photo by: Reuters
Finance Minister Tito Mboweni has said the South African Revenue Service (Sars) needs "intrusive capacity" to investigate taxpayers concealing earnings and to counter the illicit financial flows in cigarettes, alcohol and fake goods.
Mboweni was responding to a Parliamentary question by the Economic Freedom Fighters' (EFF's) Mbuyiseni Ndlozi. The EFF spokesperson asked the minister whether he agreed with remarks previously made by Treasury Deputy Director-General, Ismail Momoniat, in a committee meeting in September.
Mboweni, in response, said that he concurred with Momoniat's view "on the general requirement for intrusive capacity for a well-functioning revenue-collection authority".
"I am sure the Honourable Member will also agree that Sars must have significant intrusive powers, not only to deal with taxpayers concealing information on income received, but also to counter illegitimate trades (and financial flows) in commodities such as tobacco, liquor and counterfeit goods."
Mboweni said that, since the agency is a "semi-autonomous revenue authority which determines its own internal organisation", the tax agency's commissioner should be able to provide information on the functions of its units.
The finance minister noted that the Nugent commission of inquiry into Sars, set up by President Cyril Ramaphosa to investigate its administration and governance, found in its final report that it could find no reason why the operation of a unit to gather intelligence on illicit trades "even covertly, within limits" was not legal.
"Indeed, Sars must not be a toothless tiger when dealing with tax evasion and illegitimate trades and financial flows," said Mboweni.
The EFF and its deputy head Floyd Shivambu have in the past been criticised by Treasury and the finance oversight committee for alleging that Momoniat – who often appears at Parliamentary meetings to brief MPs – had a superiority complex which did not allow him to take orders from African seniors.
In June 2018 Treasury said that the red berets displayed a "gross misunderstanding of parliamentary processes. Furthermore, the EFF has abused parliamentary privilege to throw mud at Treasury staff."
Ndlozi at the time backed Shivambu, alleging that Momoniat had "no regard for black, particularly African leadership".