Mboweni won't say if Bosasa tax inquiry will look into CR17 donation
Finance minister Tito Mboweni has declined to say whether the tax inquiry into Bosasa affairs would be extended to investigate a donation the company made to then ANC presidential candidate Cyril Ramaphosa's CR17 campaign, citing confidentiality.
Mboweni said according to the law governing tax administration, a tax inquiry was private and confidential and the same law prohibited the disclosure of a taxpayer’s information.
He was responding to a written parliamentary question from DA leader Mmusi Maimane, who wanted to know the terms of reference of the Sars tax inquiry into Bosasa and persons associated with the company.
He also wanted to know whether the inquiry would investigate the R500,000 donation made by Bosasa to the CR17 campaign, and whether the specified R500,000 donation was declared for income or donations tax.
“The questions relate to taxpayer information provided by a taxpayer and taxpayer information obtained by Sars in respect of a taxpayer.
“Sars is prohibited from disclosing such taxpayer information in terms of section 68 (1)(b) of the Tax Administration Act (TAA), Act 28 of 2011,” Mboweni said in a written response published by parliament on Tuesday.
“Due to the confidentiality provisions contained in the TAA, Sars is accordingly not in a position to provide any specific information pertaining to the ambit of the inquiry outside of the specified provisions,” he said.
Mboweni explained what a tax inquiry was, the legislative provisions governing tax inquiries and the process Sars follows when a matter comes to their attention. He defined a tax inquiry as a formal process with witnesses subpoenaed and evidence led under oath or solemn declaration, but it remains an information gathering mechanism.
He said Sars had an independent case selection methodology to protect the governance of how matters were followed up to ensure there was a verifiable trail that informed how cases were selected.
When a matter came to the attention of Sars, it was reviewed and evaluated to ensure the validity or merit of the case. Once the revenue service had applied its mind and possible grounds were established, the case was investigated further. Should additional information be required, there were a number of instruments at Sars' disposal that could be used to collect relevant information.
A request for relevant material
Producing relevant material in person during an interview at a Sars office
An inspection, audit or criminal investigation
A tax inquiry before a presiding officer, and search and seizure.
He said based on the facts of the case, the most appropriate investigative approach would be selected.
Mboweni said before an inquiry into the tax affairs of a person could be held, Sars needed to apply through an ex parte application to a judge of the high court for an order designating a person to act as a presiding officer. The order would also be specific to the ambit of the inquiry.
“According to section 56 of the TAA, the tax inquiry is private and confidential. The secrecy provisions of the TAA apply to all the persons present at questioning, including the persons being questioned,” he said.
The minister said information disclosed during an inquiry constitutes taxpayer information and is subject to the confidentiality provisions of the TAA.
The information obtained during the inquiry would be used by Sars to conduct investigations into the taxpayer’s affairs to establish whether they complied with their obligation in terms of the relevant tax acts administered by the commissioner for Sars.
Sars launched the inquiry into Bosasa to establish facts about allegations that the company had over the years dodged its tax obligations.
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