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Civil activist organisation the Organisation Undoing Tax Abuse (Outa) has expressed its deep frustration with the pace of investigations and prosecutions of corrupt individuals in the South African government and civil society.
Outa CEO Wayne Duvenhage said civil activist and other non-profit organisations are playing a far more meaning role than the authorities in fast-tracking some of the corruption cases.
However, it frustrates them when they do a lot of the work and nothings happens because the authorities just want “more and more” information.
“We believe by now so many more people should be in court and probably be in jail. It is taking far too long.”
Duvenhage said all one needs is clear proof of wrongdoing.
He was participating in a panel discussion on SA’s ability to recover stolen money at the Tax Indaba, hosted by the South African Institute of Taxation (Sait).
The authorities often just keep digging and try to cover their tracks by having more than one arrow in their quiver. “You only need one if your shot is very accurate. Digging more and more just muddies the water, brings more people into the process and makes the case more complicated. That is how people get away,” he said.
Enjoying the fruits of evil conduct
“That is why we are frustrated with the fact that for many years there has been so much evidence, but people are still walking the streets and enjoying the fruits of their evil conduct. That is not good enough.”
Several investigative journalists have painstakingly investigated the financial shenanigans of high profile politicians and their tax return declarations.
For the public the amount of forensic evidence that has already been discovered and exposed through these investigations, as well as those of Outa and Corruption Watch, it seems many cases are a slam dunk.
However, there is no feedback on the progress the South African Revenue Service (Sars) has been making on any of the information about tenderpreneurs or the under-declaration of assets and income from politicians.
Onus of proof
Raheema Ismail, senior manager of investigations at Sars, remarked that the onus of proof on Sars and other enforcement agencies is more onerous.
“We have different accountabilities and responsibilities. It may seem that the information that is gathered by journalists or non-profit civil activists is sufficient to prosecute someone, but we have to dig deep enough.”
It is necessary to bring a watertight case to court, even if it is just the one. “It will be remiss of us to only do part of our work in bringing a matter to criminal prosecution. We have to do everything in our power to achieve success.”
Ismail said it is not a matter of only recovering the stolen money, or putting someone behind bars. It has to be both, but it has to be based on the principle of proportionality.
Legislation is prescriptive around the sanctions for certain behaviours. If one simply goes after the tax, it is likely that in some instances the behaviour will not change.
Getting the money back
Chad Thomas, CEO of IRS Forensic Investigations, said there is a “symbiotic relationship” between corrupt players in the public sector and those in private sector. The relationship was created to plunder the public purse; whether it was by inflating a tender or by the creation of tenders.
One manner in which stolen money can be recovered is to attach the pension fund of those who are found to be involved in criminal and corrupt activities. This method is not used often enough, he said.
“The funds can be returned to the fiscus to offer some form of restitution over and above the criminal restitution.” By attaching the pension fund, it can be used as a bargaining tool.
Nobody wants to lose their pension, but if the money can prevent them from going to jail it becomes another story altogether.
Thomas said legislation allows for the preservation of assets and pension funds even if the person has not been found guilty – there is room for putting interim preservation orders in place.
“Once the funds have been preserved [they] cannot be used for any other purpose except perhaps for the accused in respect of reasonable legal fees.”
‘Politically protected unit’
Sait CEO Keith Engel referred to the VIP unit that has been established by Sars to deal with the tax affairs of high-net-worth individuals, senior government officials, judges, the head of the army and other prominent persons.
The rumour is that the unit is really the Politically Protected Unit, he said.
“If the unit looks after you it seems you are safe from audits.”
Ismail discounted the rumour by saying that it was not created for the protection of anyone. “This is not a classification that awards privilege. It does not imply privilege. It is only to enhance the service offering [by Sars],” she said.
Engel acknowledged that privacy protection laws, especially in civil tax findings, remain important for Sars.
However, the Nugent Commission of Inquiry into governance and tax administration at Sars heard in the testimony of a former head of legal affairs that she had been instructed to write off tax or penalties for certain individuals who were part of the unit during the state capture era.
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