SARS dismisses irregular VAT payment allegations

Friday, March 16, 2018

The South African Revenue Service (SARS) on Friday dismissed allegations that irregular Value Added Tax was made to Oakbay Investments.

“The South African Revenue Service has noted with some dismay the media reports that allege irregular value-added tax (VAT) payments to Oakbay,” said the revenue service in response to the purported payments linked to the Gupta family company.

This as the Daily Maverick reported that Commissioner Tom Moyane played a role in the matter that resulted in R70 million VAT repayments to Oakbay.

“SARS wishes to state categorically that the allegations linking Mr Moyane to the refund payment are malicious, disingenuous and part of the well-orchestrated agenda to discredit him.”

The revenue service said that Oakbay escalated their complaint regarding the payment of a legitimate refund due to them on 22 May to the Commissioner.

The escalation of complaints by taxpayers to the Commissioner is a frequent occurrence, said the revenue service, adding that the Office of the Commissioner always escalates complaints to the relevant division as a standard procedure.

The office of the Commissioner referred the complaint to the division which deals with taxpayer complaints, then to legal services.

“The referral to legal services was necessary because the complaint was about the interpretation of aspects of the VAT Act. The undeniable fact that must be stated unambiguously is that at no point did the SARS Commissioner instruct any SARS employee on how to deal with the Oakbay matter.”

The legal department, led by Refiloe Mokoena, which comprises of experienced and well respected tax experts, had to provide a legal opinion whether or not the VAT Act allowed for the refund of the taxpayer to be paid into the Oakbay account or a third party account. 

Commissioner Moyane was copied in on the email exchanges that took place among the experts, which is a norm in high-level matters but he never intervened in these email exchanges, either for or against a particular view.

After a decision was made this was communicated to the division responsible for paying the refund.  

The revenue service pointed out that Section 72 of the VAT Act gives the SARS Commissioner powers to make such decisions, but that in this case the Commissioner did not use these powers.

“Although section 72 of the VAT Act refers to the Commissioner, it does not mean literally that the Commissioner must make such a decision. Section 5 of the VAT Act provides that the powers conferred by the VAT Act on the Commissioner may be made by the Commissioner or by any SARS official.”

It noted that a decision in terms of section 72 need not be made by the Commissioner, and that historically, officials in the legal division make decisions in terms of section 72.

“Anyone who has ever received a refund from SARS will know that the payment of a refund does not need the Commissioner’s approval. In other words, once Ms Mokoena ruled on the matter it gets referred to the relevant department to ensure automatic payment,” it said. – SAnews.gov.za

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