Thursday, March 31, 2016

The strained relationship between Finance Minister Pravin Gordhan and the Commissioner of the South African Revenue Service (SARS), Tom Moyane, has been the subject of intense media scrutiny in what has come to be termed the “SARS Wars”.  As public concern has grown regarding the effect of the tension on the effectiveness and stability of SARS, there have been persistent calls for President Jacob Zuma to intervene and remove Moyane.

However, statements by the various players on the issue have not alleviated that concern. The Presidency released a statement on 29 February that avoided the question of whether President Zuma has the power to remove Moyane, and labelled such demands as unhelpful. The statement referred to “prescripts within government”, which stipulate how “labour relations issues” within government agencies should be resolved.  For its part, SARS has stated that the Commissioner will not resign, as he serves at the behest of the President, who appointed him.

It is correct that  the President has the power to appoint the Commissioner in terms of section 6 of the South African Revenue Services Act No. 34 of 1997 (the SARS Act).  However, before the SARS Act was amended in 2002, the power to appoint the Commissioner rested with the Minister of Finance.  Since 2002, the SARS Act has only allowed the Minister to designate another SARS employee to be Acting Commissioner, and then only if the Commissioner is absent or otherwise unable to perform the functions of the office, or during a vacancy in that office. However, the SARS Act is silent on the removal of the Commissioner.  So the question remains: does the President also have the power to remove the Commissioner of SARS from office?

The answer may lie in another tumultuous chapter of South African politics. In the case of Masetlha v the President of the Republic of South Africa and Another 2008 (1) BCLR 1 (CC), the Constitutional Court had to rule on the constitutional validity of the President’s decision to suspend and later terminate the employment of Billy Masetlha as the Director-General of the National Intelligence Agency (NIA).   In that case, the President’s power to appoint the head of the NIA was located in the relevant sections of Intelligence Services Act (ISA) read with the relevant sections of the Public Services Act (PSA).  However, the PSA was silent on the power to dismiss the head of the NIA.

The court held that the President’s power to appoint and dismiss the Director-General was not exclusively located in the PSA (which provided for the manner and form of his contract). The PSA had to be read in the context of the greater constitutional and legislative scheme, which implicitly conferred that power on the President. The power to dismiss was not expressly conferred on the President in the legislation, but it was necessary in order to exercise the power to appoint.  The court found that the power to dismiss was therefore a corollary of the power to appoint and concluded that the power to dismiss had to be read into the relevant section of the Constitution.

The Constitutional Court’s reasoning in Masetlha should be applied to the appointment and removal of the Commissioner of SARS.  The President’s power to remove the Commissioner should therefore be implied in his power to appoint the Commissioner as provided for in terms of the SARS Act.

To confirm whether there are any other powers that the Minister may or may not have over the Commissioner and SARS, one would need to consider the provisions of the Public Finance Management Act, 1999. The Minister and National Treasury have very broad powers under that Act. Nevertheless, it does not seem that those powers would extend to the removal of the Commissioner. Accordingly, regarding the ultimate fate of Mr. Moyane, it would seem that the ball is firmly in President Zuma’s court.

Article by Robert Hare and Katrien van Aswegen