Sars, Monyane and the missing trillions

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Smooth Operator, Tom Monyane. (Photo sourced.)

IN a brilliantly investigative piece, Daily Maverick reported facts and figures which reads like a crime novel. The Nugent Commission of Inquiry into SARS heard on Friday last week what was arguably its most important oral evidence of the week, a masterclass from tax boffin Cecil Morden.

 Cecil Morden’s analysis of SARS’ tax data over the course of the past seven years shows that the tobacco industry is making a killing: Tobacco manufacturers are not paying their worth of excise tax, have increased their smuggling activities and are probably under-declaring their manufacturing figures. Morden also substantiated what business owners (except the Guptas) have been complaining about for the last four years: VAT refunds have been illegally withheld to artificially boost revenue income.

This tactic had a detrimental (but predictable) knock-on effect in the following years. Morden further showed that something is up with Personal Income Tax and warned that the effect of Tom Moyane dissolving the Large Business Centre (LBC) will probably be noticeable in the coming year’s Corporate Income Tax figures. Oh, and that R1-Trillion “psychological” revenue mark Moyane (and now Adv Dali Mpofu) often boasted about breaching? It is all “smoke and mirrors”, Morden said.

In short: SARS is less effective now than it was before Tom Moyane’s appointment as Commissioner in September 2014, and the effects of his disastrous tenure will probably reverberate in the years to come. Then again, this man was appointed by Zuma and is represented by a Mabuza. Reality in SA politics, depending on whose side you are on.