Parliament asks legal advisor in weigh in on third party VAT repayments


Cape Town – Parliament’s standing committee on finance said on Friday it has asked its legal advisor to weigh in on the lawfullness of SA Revenue Service making VAT repayments to a Gupta-linked company via a third party. 

The statement was issued after Daily Maverick reported on Friday that it was in possession of documents detailing the lengths to which SARS Commissioner Tom Moyane went to ensure that R70m worth of VAT refunds were paid, via third party Terbium Financial Services, to Oakbay.

SARS, however, denied what it called the ‘malicious’ report on Friday afternoon, saying Moyane did not make the decision, but rather legal experts at the tax agency. 

Committee Yunus Carrim said in a statement that tax law was unclear over whether the SARS head had discretion to approve VAT repayments via third parties. 

He said the law was a matter of contention, even at the tax agency itself.

The company that received the repayments as a third party, Terbium, itself “seems to be divided about whether it was legal”, he added.  

Earlier in the week Business Day had reported that Moyane’s removal is imminent and was being discussed at a Cabinet level.

The revenue service’s chief officer of business and individual tax Jonas Makwakwa, meanwhile, abruptly resigned under a cloud of allegations of improper payments on Wednesday. 

Makwakwa denied any wrongdoing. 

‘Legal or not?’

Carrim said the speed at which Terbium received the refunds from SARS suggested the Gupta companies enjoy special treatment of some type from the tax body.

“SARS’ actions in the case of the Gupta companies, even if legal, suggests that they were treated favourably, given the delay in VAT returns when it comes to many other tax payers.

“Presumably, the banks closed down the accounts of Gupta companies in terms of legislation that prevents them from servicing clients who have a case to answer for wrong-doing. Did SARS take that into account in making its decision, as the same legislation also has implications for them?” he said.

He added, however, that Gupta-affiliated companies should not have to pursue VAT repayments from SARS in order to pay their employees their salaries. 

When Fin24 first reported on the R70m VAT refund in June 2017, SARS said it could not divulge any information on the matter. 

In its article published Friday, Daily Maverick provided details regarding the extent to which Moyane was allegedly involved in approving the payments.

Daily Maverick said Moyane’s actions in aiding the payments may have constituted a contravention of the Value Added Tax Act of 1991 and other tax legislation.

It reported that Oakbay Investments received three payments amounting to R70m via Tiberium within to weeks of making a request to SARS in May 2017.


But SARS on Friday afternoon denied the repayments were unlawful. 

In a statement, the tax agency said that the report by the Daily Maverick that Moyane was linked to the refund payments was incorrect.

It said Moyane did not make the decision. 

“SARS finds it necessary to address the unsubstantiated tone of the report published in the Daily Maverick that suggests corruption and a dictatorial attitude on the part of Commissioner Tom Moyane that resulted in R70-million VAT repayments to Oakbay,” it said.  

“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.”

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