Treasury not formally notified by SARS of Makwakwa’s suspension

The National Treasury has not been formally notified of the suspension of the second in charge of the South African Revenue Service (SARS)‚ Jonas Makwakwa.

In a statement on Thursday‚ the treasury noted the suspension which was reported in the media‚ however‚ it was awaiting further information from the tax agency on the action to be taken by senior management of SARS.

 The treasury in the statement said it met SARS commissioner Tom Moyane and another senior official earlier this week to discuss the matter.

The SARS commisioner is expected to report to the Minister of Finance‚ Pravin Gordhan. But relations between Moyane and Gordhan have been difficult since his return to the helm of the treasury in December. Moyane lodged the criminal complaint with the Hawks that led to the investigation into Gordhan’s role in the alleged “rogue unit” at SARS.

 “National Treasury believes that public confidence and transparency are critical in order to be seen to be doing the right thing in this matter‚” the statement from the treasury said.

 Earlier this week ANC economic transformation subcommittee head Enoch Godongwana in an interview with eNCA said it was “unprecedented” that the finance minister had no control over the revenue service which was meant to report to him.

 “You have got a situation which is unprecedented‚ a minister of finance who has no control over his revenue service‚ SARS. It is unprecedented because your finance minister must have control of both the revenue and expenditure sides‚” he said in the interview.

“That in itself has been a problem‚ and the fact of the matter is that the initiation of this criminal complaint [against Gordhan] is by that same revenue service.”

Moyane‚ in an internal notice to staff on Thursday‚ announced Makwakwa’s suspension over suspicious and unusual payments into his accounts of R1.2m between 2010 and 2016.

According to the staff announcement‚ Makwakwa was suspended pending a full investigation into the matter.

It is understood that Makwakwa was this week asked to provide “oral reasons” why he should not be suspended.

“I would like to assure all of you that when this matter was brought to my attention SARS took all the reasonable

steps within our policies to engage with this matter‚” Moyane said in the internal notice.

 While Moyane said the controversy surrounded Mawkawka and his reported girlfriend who is also in SARS employ‚ Kelly-Elskie‚ he announced only Makwakwa’s suspension.

 Moyane took action this week after meeting th finance minister on Monday. It is understood that he received the report on the suspicious transactions from a credible banking regulator in May.

 This followed a report in the Sunday Times that Makwakwa‚ SARS chief officer for business and individual taxes‚ had received “unexplained” cash deposits and bank transfers amounting to R1.2m between 2010 and 2016.

Deposits of R450‚200 were also made into his girlfriend’s bank account‚ in December 2015.

 The information was contained in a report from a banking regulator and relies on bank records and camera footage from banks where the deposits were made.

The suspicious deposits‚ according to a section of the report from the banking regulator required investigation to determine whether they were the proceeds of crime or money laundering so that appropriate criminal action could be taken.

It said between March 1‚ 2010 and January 31‚ 2016‚ 75 cash deposits amounting to R785‚130 were deposited into Makwakwa’s personal account. Forty-eight of these payments amounting to R726‚400 were deposited between 2014 and 2015.

The report said the volume and the amounts of the deposits were “highly unusual” as Makwakwa was permanently employed.