Jonas Makwakwa is the highest paid official in SARS with almost R5-million in annual earnings for the financial year 2016/2017. The earnings of SARS’ Chief Officer Business and Individual Taxes topped even that of tax boss Tom Moyane’s R789,000. Moyane’s income was listed as R4.1-million in the past year – he did not afford himself a bonus. This was revealed in SARS’ annual financial statements filed in Parliament late on Wednesday night. The statements were filed after the deadline because of the scuffle Moyane’s mulish conduct created with the Auditor-General. Moyane unlawfully signed off on a R3-million bonus to his executive, of which Makwakwa’s was a sizeable portion.
This is a truly astounding set of facts. Makwakwa stands accused of extremely serious criminal offences. He is the second most powerful man in SARS, and now we know he is also the best remunerated. And yet, despite his lucrative annual salary, in May 2016 the Financial Intelligence Centre (FIC) provided a damning report, saying Makwakwa has a “dependency on suspicious cash deposits and payments to maintain his current standard of living”.
The FIC analysed the bank accounts of Makwakwa and his girlfriend Kelly-Ann Elskie between 2014 and 2016, finding that the pair stuffed hundreds of thousands of rand in unexplained cash into ATMs. Some of the money flows into their accounts looked an awful lot like money laundering schemes and Makwakwa’s expenditure was often more than twice his sizeable salary at SARS. Consequently, the FIC ordered an investigation into the matter to determine whether the “suspicious and unusual cash deposits and payments” into Makwakwa and Elskie’s accounts were in fact “proceeds of crime and/or money laundering”. Yet Scorpio revealed this week that his disciplinary hearing was so rigged that it bordered on the realm of being cooked. Moyane appointed international law firm Hogan Lovells to conduct the disciplinary hearing, but the firm allowed Makwakwa to answer only on a fraction of the allegations levelled against him.
Apart from the problems with Makwakwa’s bonus, Moyane has been on the sharp end of the Auditor-General’s tongue because of these payments. These unauthorised bonuses have been the subject of furious and vociferous battles between Moyane and then minister of finance Pravin Gordhan since 2016. In line with the SARS Act, SARS management has for years obtained approval for their bonus payments from the minister of finance. But Moyane refused to account to Gordhan and paid out the bonuses anyway. This despite Gordhan’s warning that this would be “immoral” and “illegal”. At the time it seemed as if Moyane would get away with it.
That is until the matter reached the Auditor-General. Auditor-General Kimi Makhwetu was scathing about the internal controls in SARS.
“I consider internal control relevant to my audit… however, my objective was not to express any form of assurance thereon,” Makhwetu said in his report on the audit of SARS’ statements.
In less eloquent and simpler terms: Makhwetu warns that he has no faith in SARS’ governance processes. Coming from the Auditor-General, and a government official of Makhwetu’s reputation, this is a serious indictment against Moyane.
But Moyane did not only find the Auditor-General on his back. DA spokesperson on finance Alf Lees has threatened to make Moyane pay the bonuses back out of his own pocket.
Said Lees: “
Given that the bonuses were paid illegally and that Jonas Makwakwa was under investigation, these bonuses must be paid back by the recipients, failing which Tom Moyane must be made to repay the R3-million together with interest.”
Under Moyane’s reign, SARS now sits with a revenue deficit of at least R50-billion, predicted to grow towards the end of the current financial year. It is time for Parliament’s various committees to step in and ensure that SARS doesn’t slip into the looming abyss.
PAULI VAN WYK for SCORPIO