LETTER: Leon misses the mark on Phala Phala

Tony Leon’s column on the Phala Phala matter refers (“With Ramaphosa’s zugzwang, it’s goodbye to the new dawn”, December 8). His assertion that President Cyril Ramaphosa may be attempting to dodge the SA Revenue Service (Sars) is false. Ramaphosa has no income to declare regarding the “sale” of buffalo at Phala Phala.

In terms of International Financial Reporting Standards 15, the criteria for the recognition of revenue in the sale of goods include that:

• The risks and rewards of ownership must pass from the seller to the buyer; and
• The seller must not retain control over the goods.

This essentially means the buffalo should have been delivered to the buyer from Sudan. This did not take place. There was therefore no obligation on Ramaphosa to declare any income from the “sale” of buffalo in 2020 to Sars, and crucially no tax evasion as speculated by all and sundry.

The section 89 panel’s report also exceeded its term of reference by saying there is no apparent evidence that the foreign currency was declared to the Reserve Bank. The Bank did not submit any evidence to the panel.

There is also a perception of bias by one of the panellists, who previously socialised with the suspended secretary-general of the ANC, a known political adversary of Ramaphosa. This panellist failed to declare that she couldn’t be independent in appearance on this matter, hence the present outcry on social media that she was biased.

The ANC was therefore correct to reject this report without waiting for answering affidavits from the panel.

Jeffrey Mothuloe, CA (SA), Via email

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