SARS commissioner Edward Kieswetter has clarified the two reports that SARS published this week relating to President Cyril Ramaphosa and his businesses’ tax status, including the $580 000 payment for cattle.
SARS released two statements in the past week – one outlined their inability to trace the $580 000 used to pay for Ramaphosa’s cattle and the second stated that Ramaphosa and his business entities are tax compliant.
Kieswetter, in an interview on SABC, explained how it is possible that the dollars cannot be traced, yet Ramaphosa and the entities are tax compliant.
The untraceable dollars
According to customs laws, accountability for bringing cash into the country rests with the traveller – in this case, Sudanese businessman Hazim Mustafa.
Any amount of cash above R25,000 has to be declared to SARS customs officials at the port-of-entry and SARS will retain the excess. The traveller must then apply to the South Africa Reserve Bank for the release of the money.
Kieswetter stated explicitly that “SARS can find no evidence that such a declaration has been made” by Mustafa in relation to the $580,000.
Mustafa maintains that he did declare the dollars. However, as SARS cannot find evidence of this, it is up to Mustafa to prove otherwise.
Ramaphosa’s tax compliance
SARS’ second announcement made it clear that Ramaphosa and his business entities, including Phala Phala, are tax compliant.
To be declared tax compliant after an audit, “SARS has to satisfy itself that all income that has been disclosed in the tax return is correct” and that all deductions are allowable, said Kieswetter.
Ramaphosa and his businesses were selected for an audit based on SARS’ methodology prior to the media breaking the Phala Phala story.
Kieswetter made it clear that “in all instances, for the three entities [Ramaphosa and his businesses], SARS has assessed all the outstanding returns” as part of its audit.
“Based on the audit and investigation we have done, we can say that all outstanding returns and questions are submitted and all outstanding payments are paid. There is, therefore, no outstanding liability and this means the taxpayer is fully compliant,” said Kieswetter.
Ultimately, Ramaphosa and his businesses are “fully compliant in the fulfilment of their obligations” and all of SARS’ assessments in this regard are complete.
When asked if SARS would be pursuing a criminal investigation in the attempt to trace the $580,000, Kieswetter said that this is only possible if there is evidence that a criminal act was committed.
The South African Police Service is still investigating the Phala Phala robbery separately from SARS’ investigations.
Kieswetter called on “all high-profile leaders in society, politicians in particular, to be more transparent” with regard to their tax affairs.