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Sun Jun 26 10:09:17 SAST 2016

Gordhan confirms existence of a SARS spy unit

TMG Digital | 30 March, 2016 16:35
Pravin Gordhan, when he was minister of co-operative governance and traditional affairs, before he was catapulted back into the Treasury hot seat.
Image by: RUSSELL ROBERTS

Finance Minister Pravin Gordhan has confirmed the existence of a spy unit within the South African Revenue Service (SARS)‚ and that he approved its establishment when he was the entity’s commissioner.

“It became apparent to SARS that it had to enhance its capacity to gather intelligence (departmental intelligence) and investigate organised crime related to tax and customs legislation (for example cigarette smuggling). SARS decided in about February 2007 to set up the Unit to penetrate and intercept the activities of tax and customs related crime syndicates‚” he said.

Gordhan issued a statement on Wednesday answering questions sent to him by the Hawks about the so-called “rogue unit”.

He stated: “The unit did not initially have a name but was later successively known as the Special Projects Unit‚ the National Research Group and the High-Risk Investigations Unit. I participated in the decision to establish the Unit in February 2007.”

“My legal advice is that the establishment Unit was lawful.”

Gordhan’s statement is in answer to 27 questions sent to him by the Hawks on the eve of the national budget. The Directorate for Priority Crime Investigation‚ also known as the Hawks‚ is investigating the unit on suspicion of it conducting illegal surveillance on taxpayers.

Gordhan missed two deadlines to answer the questions‚ citing his heavy workload since being reappointed finance minister in December and questioning the legal authority on which the investigation was based on.

In a highly unusual move‚ the Hawks lashed out at the minister‚ accusing him of attempting to stall its investigation into the unit and of seeking "preferential treatment".

Gordhan has a tense relationship with current SARS commissioner Tom Moyane‚ who began driving the probe into the unit‚ and all those linked to it‚ shortly after taking up the post at the tax agency at the end of 2014.

In his statement on Wednesday‚ Gordhan said: “My legal advice is that I am not obliged‚ under any law‚ to answer the questions sent to me by the Hawks‚ but I believe it is in the public interest that I provide them with information I have at hand. Be that as it may‚ as a law abiding citizen I have decided to co-operate fully”.

He said the unit was an essential part of SARS’ enforcement strategy.

“The Unit’s establishment was in line with government’s commitment to crack down on crime generally and organised crime in particular.

“SARS decided in about February 2007 to set up the Unit to penetrate and intercept the activities of tax- and customs-related crime syndicates.

“Its initial intention was to employ and train the members of the Unit and then to transfer them to the National Intelligence Agency (NIA) where they would continue to function as a unit dedicated to SARS. The NIA‚ however‚ lost traction for the project as a result of which SARS decided to retain the Unit within its Enforcement Division but with an appropriate mandate.”

Gordhan said the unit was part of the broader enforcement division of SARS – similar to the enforcement capabilities required in any tax and customs administration in the world.

“Enforcement actions are more effective when they are guided by good risk assessments and information from various stakeholders.

“During my time as Commissioner‚ the chief executive officer of SARS‚ the Unit employed 26 odd people‚ a miniscule part of the 15‚000 staff complement of SARS.”

Gordhan said his knowledge of the unit’s day-to-day operations was limited.

“I was not personally involved in the recruitment of its members but I am told that the process was in accordance with SARS policy. If it or any of its members engaged in unlawful activities then they did so without my knowledge or consent.”

Gordhan reiterated his contention that the Hawks had no reason to investigate him – and‚ controversially‚ called for a defence of the country’s key institutions.

“All of us should be concerned about protecting our democratic institutions in a manner that assures public confidence that these institutions will not be arbitrarily tampered with. This is what the Constitution requires of all of us‚” the finance minister said.

“These are challenging economic times in South Africa and in the world. Our biggest challenge as a nation is to ensure that we are able to grow this economy so we can create jobs for our people and make inroads in addressing poverty. That is the work I would like to focus on with the National Treasury team.

“SARS is an important fiscal institution. We cannot afford to let this key institution be distracted from its core mandate of revenue collection. The institution and its 15‚000 or so employees are a crucial pillar of our democracy. Let's all defend this critical institution.”

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