Sars Lawyer: Tom Moyane did not break the law

Sars commissioner Tom Moyane has come under fire for authorising a a R70-million VAT refund to a Gupta-linked company through a third party. He has been accused of money laundering.

Erick Smith, Legal Specialist at Sars says that under no circumstances was the law broken when making these payouts. READ: Fresh claims Tom Moyane fast-tracked fake R70m VAT payments to Gutpas

I can assure you that whilst there were different legal interpretations on the manner of which a VAT refund must be paid, I reinterate, the VAT refund was due and payable by law to the tax payer in this matter.

Erick Smith, Sars Legal Specialist

There was absolutely no transgression of the law in the payment to the tax payer in this case.

Erick Smith, Sars Legal Specialist

Smith says that Moyane's involvement in the payout is also within the bounds of the law, as he is the accountable office within Sars.

According to Smith, normally tax payers escalate their frustrations and concerns to the commissioner, but it is normally dealt with by the legal team.

[WATCH] 'Tom Moyane is a liar' - Kieno Kammies

As to the allegations of wrongdoing and evidence showing top officials warning that these payments would be highly irregular, Smith says that boils down to differences in legal interpretation.

And the issue of third party payments?

I can tell you quite openly that I was one of the legal specialists who had a different interpretation as to whether a taxpayer can be refunded to a third party bank account. Because of the Sars Act, in an attempt to prevent fraud and payments going to the wrong bank account - we had a view that we could not pay a refund to a particular account nominated by the taxpayer in this case.

Erick Smith, Sars Legal Specialist

But there has been an earlier interpretation, by a very senior tax specialist within Sars which invoked another provisional act, which provides for anomalous circumstances. And in those circumstances, the commissioner, through his official, can use his discretion to deal with anomalies.

Erick Smith, Sars Legal Specialist

Smith says this case had an usual set of circumstances. He adds that they money was due and they had to pay it. The only difficulties Sars faced was the interpretation regarding which account the money should be paid to, according to Smith.

In this case, the money was due and payable. It had been through a though audit process - so we had to pay the money.

Erick Smith, Sars Legal Specialist

The Guptas were given no favour.

Erick Smith, Sars Legal Specialist

Listen to the full report below:


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