Government should look at amending legislation to have the commissioner of the South African Revenue Service (Sars) report to a board rather than the minister of finance.
This was one of the suggestions made by Judge Dennis Davis, chairperson of the Davis Tax Committee (DTC), to MP's on Parliament's Standing Committee on Finance on Tuesday. He was reporting back to Parliament about the DTC's work over the past year and explained his mandate – to look at tax policy – has been expanded by Gordhan to include Sars' operational structure.
Davis explained his mandate – to look at tax policy – has been expanded by Gordhan to include Sars' operational structure.
Yunus Carrim, African National Congress (ANC) MP and chairperson of the committee, says MP's have received legal advice that the commissioner is accountable to the minister in terms of the Public Finance Management Act (PFMA). Parliament's legal advisors however told MP's the exact nature of what the relationship needs to be might have to be clarified further in law.
"When the DTC appeared before our committee on Tuesday, Davis raised the possibility of a board overseeing the work of Sars. Government needs to consider this and decide on how a board would relate to the ministry as part of an overall review of the governance of Sars," Carrim told The HuffPost SA.
When the DTC appeared before our committee on Tuesday, Davis raised the possibility of a board overseeing the work of Sars. Yunus Carrim, ANC MP and chairperson of the Standing Committee on Finance.
The DTC has received "specific terms of reference" from Gordhan to look at Sars' governance and accountability model, consider how Sars has implemented previous recommendations by the DTC and assess how the operating model combat illicit financial dealings.
Gordhan earlier this week added an unprecedented rider to his written parliamentary answers by saying he cannot vouch for answers provided by Sars to him "because of the lack of accountability and cooperation from the Sars top management".
Sars hit back at Gordhan, saying in a subsequent statement it is "disturbed" by the "unjustifiable accusation" levelled at it. According to Sars it is committed to a professional relationship with Treasury and that Sars leadership has met with Gordhan on eight occasions since he has assumed office.
Sars hit back at Gordhan, saying in a subsequent statement it is "disturbed" by the "unjustifiable accusation" levelled at it.
Professor Somadoda Fikeni, a political analyst at the University of South Africa (Unisa) says there is no immediate prospect of the conflict between Gordhan and Moyane being resolved. He argues as long as the leadership issues within the ANC remain on the table, this "low intensity war" will continue.
"Gordhan believes Sars is being used to dislodge him as finance minister and that Moyane is busy undoing all he has done there. This conflict presents a threat to our risk ratings."
Standard & Poor's (S&P) will today announce its latest rating. S&P currently has South Africa at one notch above junk status.