BUSINESS NEWS - South African Revenue Service (Sars) Commissioner Edward Kieswetter does not – for the moment – have to disclose confidential information about the tax affairs of former president Jacob Zuma to the Public Protector’s office.
Public Protector Busisiwe Mkhwebane’s subpoena compelling him to do so was stayed by the Pretoria High Court on Tuesday. The parties will “jointly” engage with the court on the “substantial matter” relating to the disclosure of any taxpayer information to third parties, other than as stated in the Tax Administration Act (TAA).
Kieswetter addressed a media conference on the matter following Sars’s urgent application to set the subpoena aside in order to get clarity on the legal principle relating to the disclosure of taxpayer information.
The parties agreed to engage with the courts, although Kieswetter said Sars would have preferred not to resort to court action.
Protecting the right to privacy
“This deals with the fundamental legal principle of protecting the right to privacy. Notwithstanding the names in this particular matter, it affects every tax-paying South African citizen – you should want this clarity,” he said.
It became clear during the briefing that this was not the first attempt by Mkhwebane to obtain the information through a subpoena.
She issued a subpoena on the same matter in October last year when Mark Kingon was acting commissioner at Sars. Kieswetter said in an attempt to avoid litigation then, officials from both state organs jointly briefed counsel to seek a legal opinion.
“The opinion – provided to Sars and the Public Protector – clearly sets out in my mind, and confirms, that Sars cannot be compelled to provide taxpayer information to the Public Protector.”
Kieswetter referred to the specific provisions in the TAA that allow for the disclosure of taxpayer confidential information to a third party other than a Sars official.
However, this does not include the Public Protector’s office, nor does the Public Protector Act contain a provision that overrides the TAA’s confidentiality provisions.
Kieswetter said he engaged with the Public Protector earlier this year and expressed his “unequivocal support” for her office and the work that is done by her office.
The subpoena thus came as a surprise as he thought the goodwill expressed at their meeting would have been reciprocated. He would have preferred to settle the matter without having to resort to the courts.
‘Rock and a hard place’
Receiving the subpoena was akin to being caught “between a rock and a very hard place” – with significant potential personal legal consequences for him, including being guilty of conducting a criminal offence.
“On the one hand the provision of taxpayer information – if our understanding of the TAA bears out, which we believe it does – would be a fundamental breach of the act’s confidentiality provisions,” he said.
At the same time, by not responding to the subpoena and the request for information by the Public Protector, the commissioner would equally be guilty of a criminal offence. He could end up in prison.
“However, there is a fundamental issue of confidentiality of taxpayer information at stake, which I am compelled to uphold for the benefit of all taxpayers.”
And those principles are not limited to the tax affairs of people of influence, or Zuma for that matter.
Kieswetter said that it is in every taxpayer’s interest that they obtain legal clarity on whether taxpayers have a right to privacy, which concerns the right to confidentiality of all information – personal and financial – held by the tax authority.
When asked whether it is not in the public interest that some information be disclosed, Kieswetter said the matter of public interest does not stand uncontested.
The legislators, when they drafted the act, did consider the issue of public interest.
“They drafted the law clearly expressing the view that the confidentiality of a taxpayer’s information is an overriding public interest when deciding whether we disclose a matter that may be newsworthy,” he said.
“We do not appeal to sensationalism,” he added.
“When we administer the act we do so without fear, favour or prejudice, and we treat each taxpayer equal before the law.”
Kieswetter said he was encouraged by the fact that the two organs of state agreed, and that it was endorsed by the courts, that the subpoena will not be enforced as was initially intended.
Kieswetter added however that it does not mean that either party compromises on their right to either reissue the subpoena in the case of the Public Protector or for Sars to apply to the court for relief against the subpoena, as it has done this week.