IN FULL | Moyane's statement on Makwakwa resignation
Business IN FULL | Moyane's statement on Makwakwa resignation 14 March 2018 - 15:47 By Staff Reporter Jonas Makwakwa.
South African Revenue Service (Sars) commissioner Tom Moyane has responded to Jonas Mashudu Makwakwa's resignation.
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Read the Moyane's full statement below:
I w ish to announce that Mr. Jonas Mashudu Makwakwa has resigned this morning from his employment with the SARS as the Chief Officer: Business and Individual Taxes (âBAITâ). Mr Makwakwaâs resignation is effective immediately as of 14 March 2018 at 11am.
I would like to briefly explain the chronological sequence of event that has lead to Mr Makwakwaâs resignation.
Before I do thatâ it would be prudent to state that in his letter of resignationâ Mr Makwakwa has indicated that he is resigning for personal reasons. He regards this as being an opportune moment for him to exit SARS after being cleared of all the allegations of misconduct through a formal disciplinary hearingâ and after making the investigation report into allegations of impropriety against him and his personal tax information available to Parliament for scrutiny and for public accountability. I shall deal with aspects of the investigation and parliamentary processes later in this statement.
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Mr Makwakwa has served S ARS for the past 22 years. As a resultâ I thank him for his loyal service and wish him well for all his future endeavours.
I now wish to deal with the chronological sequence of Mr Makwakwaâs resignation:
Allegations emerged of impropriety against Mr Makwakwa by the FIC and there were subsequent investigations and outcomes;
- The current stage of the criminal investigation by the Directorate for Priority Crime Investigation (âDPCIâ) under DPCI inquiry 3/06/2016 against Mr Makwakwa in respect of allegations of corruptionâ money laundering and racketeering; and
- The recent allegations of impropriety against Mr Makwakwa in respect of the selection and appointment of NEW INTEGRATED CREDIT SOLUTIONâ a debt collection agency.
ALLEGATIONS OF IMPROPRIETY AGAINST MR MAKWAKWA BY THE FIC AND SUBSEQUENT INVESTIGATIONS AND OUTCOMES
The FIC submitted the investigation report and was received by SARS during the course of May 2016. Upon r eceipt of the reportâ I engaged with the FIC with regard to the need for the FIC and the SARS to co-operate with each other in respect of an investigation into allegations of corruptionâ money launderingâ and possible violation of tax statutes against Mr Makwakwa.
The FIC submitted the report to the Hawks and the Hawks had commenced with its criminal investigation under DPCI inquiry 3/06/2016. This criminal investigation is ongoing and SARS is fully co-operating with the investigation.
With regard to the FICâ it must be noted that SARS did not receive the much-needed assistance and this process took longer than anticipated. With hindsight the differences between the FIC and SARS on this matter should have been resolved speedily.
As a result of lack of assistance from the FICâ during September 2016â SARS proceeded to suspend Makwakwa on the basis of the allegations contained in the FIC report. During October 2016â SARS appointed Hogan Lovells to conduc t an investigation into allegations of impropriety against Mr Makwakwa. Hogan Lovells were also instructed to appoint Price Water Cooper (âPWCâ) to assist with the investigation and in particular with regard to an analysis and audit of evidence of Mr Makwakwaâs financial affairs.
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Hogan Lovells together with PWC finalised the investigation and submitted a report to the SARS around May 2017. In the mainâ the Investigation Report recommended that disciplinary proceedings be instituted against Makwakwa and in particular with regard to his failure to make the required declarations in accordance with the SARS Ethics Policyâ and possible contravention of the Public Finance Management Act 1 of 1999.
Furtherâ the Investigation Report recommended that the aspects of the investigation pertaining to money laundering and corruption be fully investigated by the DPCI as an authorised authority with the necessary capability.
It is a m atter of public knowledge that Mr Makwakwa was cleared of all the charges at the disciplinary proceedings chaired by Adv. Terry Motau SC. The investigation into corruption and money laundering is ongoing and the SARS is co-operating with the DPCI.
Together with SARSâ a decision has been made to make Makwakwaâs tax records available to Parliament under conditions agreed between SARS and the Standing Committee on Finance. Mr Makwakwaâs tax records will be submitted together with the Investigation Report by Hogan Lovells and incorporating the Report by PWC. The said Report will be submitted on or before 16 March 2018.
THE CRIMINAL INVESTIGATION INTO MR MAKWAKWA ARISING FROM THE FIC REPORT
As mentionedâ this criminal investigation is ongoing and the SARS is fully co-operating with the DPCI.
THE RECENT ALLEGATIONS OF IMPROPRIETY AGAINST MAKWAKWA IN RESPECT OF THE SELECTION AND APPOINTMENT OF NEW INTEGRATED CREDIT SOLUTIONS (âNICSâ)
As I understand the allegationsâ on 13 and 14 March 2018â the media widely reported that Makwakwa irregularly participated in the tender adjudication and appointment of NICS by SARSâ notwithstanding the ongoing criminal investigation by the DPCI into allegations of corruption and money laundering involving Makwakwa and NICS together with other entities in respect of payment of over R400 000 (Four Hundred Thousand Rand)â paid to Mr Makwakwa. These allegations are currently being investigated by the DPCI on the basis of the FIC report of May 2016.
As I understand the allegationsâ Makwakwa was conflicted as he failed to declare a potential conflict of interestâ acted dishonestlyâ failed to act fairly and failed to recuse himself from the adjudication as the circumstances duly required.
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I have formally put this matter before Mr Makwakwa with the intention to suspend him in respect of the said allegations pending an investigation. At this pointâ he denied t he allegations and indicated to me that he had already decided to resign and informed Human Resources about his resignation. Due to the resignation being effective immediatelyâ it serves no purpose to proceed with this matter from an employment relations perspective.
Howeverâ an investigation will proceed to probe the allegations of irregularity surrounding the appointment of NICS. The matter will also be referred to the DPCI for criminal investigation.
Furthermoreâ the SARS is currently preparing a letter to NICS to give cause why the bid should not be suspended pending an investigation. In this regardâ SARS reserves its legal rights in law including instituting legal proceedings to terminate the relationship between the SARS and NICS.
As the Commissionerâ I would be negligent if I did not admit that the incidents surrounding the issues on Mr. Makwakwa have taught us valuable lessons. I am sure there are areas that we could improve on and could have handled better.
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