Tom Moyane. Picture: TREVOR SAMSON
Tom Moyane. Picture: TREVOR SAMSON

MPs will get more clarity on Friday about the alleged suspicious payments made to South African Revenue Service (SARS) chief officer for business and individual tax Jonas Makwakwa and his partner, as well as why he was cleared of wrongdoing.

MPs had been pushing to get two reports on the issues for several months amid accusations that the tax authority was protecting Makwakwa.

One report, about the payments, was by law firm Hogan Lovells, while the other cleared Makwakwa of wrongdoing following a disciplinary hearing.

In a letter to SARS commissioner Tom Moyane that was read out to members of the standing committee on finance, Makwakwa agreed that details and information on his personal tax affairs relating to the allegations be divulged to Finance Minister Nhlanhla Nene, committee chairman Yunus Carrim and committee members.

Jonas Makwakwa. Picture: SUPPLIED
Jonas Makwakwa. Picture: SUPPLIED

MPs also received an account on Tuesday of the reasons KMPG had withdrawn certain crucial aspects of its controversial report on the so-called SARS “rogue unit”.

In a heated meeting of the committee, Moyane agreed to make the two reports available to MPs by Friday morning before a follow-up meeting on the matter on Tuesday. That was after MPs had threatened to take the unprecedented step of issuing summons to force Moyane to release the reports.

Lavery Modise, chairman of Hogan Lovells, said they “strongly support” the release of the report to Parliament by SARS and “look forward to being able to answer any questions” in Parliament.

“We believe that it is in the interests of transparency and good governance in South Africa that the report and its annexes be made fully available to the committee and, if permitted, to the wider South African public.”

The committee said it was not yet asking for Makwakwa’s tax report but had requested the Hogan Lovells and the disciplinary inquiry reports.

The Makwakwa matter has added pressure to the embattled tax authority, which has recently courted bad publicity and is struggling to meet revenue collection targets.

The Daily Maverick reported on Tuesday SARS had appointed New Integrated Credit Solutions (NICS), a debt collector that had been implicated in an alleged money laundering ring with connections to Makwakwa.

Makwakwa was suspended in September 2016 with his partner and fellow SARS employee, Kelly-Ann Elskie.

This was after the Financial Intelligence Centre (FIC) had flagged deposits into their bank accounts. The FIC identified 75 unusual and suspicious cash deposits, totalling R1.2m, into the accounts from March 2010 to January 2016.

Makwakwa said at the time the money was from a taxi and stokvel business. SARS contracted Hogan Lovells to investigate whether Makwakwa and Elskie had contravened internal policies or the Public Finance Management Act.

An internal disciplinary hearing subsequently cleared Makwakwa and Elskie of wrongdoing, which paved the way for their return to work late in 2017.

Moyane admitted at the portfolio committee meeting that ever since Makwakwa had been reinstated in his position “a dark cloud has been hanging over the reputation” of the organisation.

“SARS is deeply concerned about the mounting allegations especially as we approach the last two weeks of revenue collection [under] a challenging economic environment,” Moyane said.

Responding to a question from DA MP Alf Lees on the latest allegations involving Makwakwa and NICS, Moyane said he did not know whether Makwakwa had shares in the company or not.

“I do not get involved [in tender or procurement processes] … if he has shares, he has to come clean with me.

“All I know is that NICS has been there and there is [someone] with the surname Makwakwa [first name Onica] in that company. Mr Makwakwa declared in a meeting that he has no relationship with Onica Makwakwa,” Moyane said.

During the same meeting Roy Waligora, head of KPMG’s forensics department, said the firm had withdrawn the report on the SARS “rogue unit” after several deficiencies were found. The conclusion and recommendations sections of the report were rescinded for various reasons including the fact that they were based on a report by SARS attorneys and thus KMPG could not “stand behind” these sections of the report.

KMPG is being probed by the Independent Regulatory Board for Auditors on its work, while a separate inquiry has been initiated by the South African Institute of Chartered Accountants.

phakathib@businesslive.co.za