NEWS
07/07/2018 09:43 SAST | Updated 07/07/2018 09:44 SAST

Why Does Malema Hate The Tax Man?

Sars and Julius Malema go way back.

Siphiwe Sibeko / Reuters

From allegations that the EFF and its donors are benefitting from the proceeds of crime to Malema's life of luxury in his pre-EFF days, Sars and the party leader have a long, acrimonious history.

The battle between the politician and the tax agency reached its zenith this week, with Malema denying allegations that an alleged illicit cigarette smuggler, Adrian Mazzotti, paid his debt to Sars.

The allegation was made by author and investigative journalist Jacques Pauw, who responded on Friday with a stinging rebuke.

Read: Jacques Pauw To Julius Malema: 'No, I Won't Apologise To You – This is Why'

He said: "You in fact received a R1-million loan from Kyle Phillips, a business partner of Mazzotti and his co-director in Carnilinx, an independent tobacco company ... I will provide you with information that in accepting a loan from Phillips, you might unwittingly have accepted the proceeds of crime.

This also goes for the R200,000 that Carnilinx paid in 2014 for the registration of the EFF as a political party."

But Sars and Malema's problems began several years ago, when the revenue service launched an investigation into the young politician's finances. Sars alleged that Malema failed to register for tax in 2005, and under-declared his income between 2005 and 2011, the Mail & Guardian reported.

Sars also alleged that Malema deliberately tried to move his assets to stop Sars from accessing them.

According to TimesLive, Sars and Malema reached an out-of-court settlement in May 2014, which saw Malema's tax bill lowered from R18-million to R7.2-million.

In terms of the deal, Malema would pay Sars R500,000 a month, apart from the R30,000 that would be deducted from his salary every month. Sars also sold off his assets, including his farms and houses, according to IOL.

But in court papers filed a year later, Sars reportedly said the deal collapsed because Malema lied about the source of his income – and slapped him with another R14-million bill.

Sars eventually backed down from its sequestration threat, according to The Citizen, saying it would turn to other legal mechanisms at its disposal to recover the money owed by Malema.

According to TimesLive, Sars accused Malema of receiving money from "questionable sources" and lying about who gave him the money to settle his bill. Had Malema been sequestrated, he would not have been allowed to become a member of Parliament.

Sars reportedly launched an application to have Malema sequestrated, finally.

This week, Malema said during his press conference on Thursday that he had paid Sars back.

The EFF went after the treasury in June, with deputy party president Floyd Shivambu launching at an attack on respected deputy director general Ismail Momoniat. Shivambu accused him of hogging parliamentary briefings to the exclusion of African directors at treasury, and accused him of being part of a "cabal" of mostly Indian struggle activists during apartheid that sought to undermine the Mass Democratic Movement.

Treasury hit back, according to TimesLive, and said the EFF's "attacks" were based on "ignorance" of how the treasury functions and makes policy.

Next, it was advocate Dali Mpofu, who is also the EFF's chairperson, who defended suspended Sars commissioner Tom Moyane at the Sars commission of inquiry. Chaired by retired judge Robert Nugent, the inquiry was established by President Cyril Ramaphosa to look into governance issues at the revenue service.

Mpofu's defence of Moyane and, specifically, his attacks on the inquiry itself, sparked a tongue lashing from Nugent, who said Mpofu's submissions were a "disgrace, no less a disgrace than counsel's conduct".

Read: Judge Robert Nugent 5, Advocate Dali Mpofu 0

Constitutional law professor Pierre de Vos, in a blog post, posited that because Mpofu's submissions were so obviously not valid from a legal perspective, they must be politically motivated.

Mpofu threatened to sue De Vos.

Days later, Malema launched an attack on the inquiry.

According to Eyewitness News, Malema said the inquiry was being driven by a faction led by former finance minister Pravin Gordhan, who wanted to capture Sars.

He said that while he believed that Moyane needed to go, the inquiry did not treat him fairly.

"A Pravin Gordhan-led grouping is at the moment conducting public hearings, fact-finding missions whose main pursuit is to consolidate Sars as theirs... I've received no favour from Tom Moyane, but you can't punish him. You can't attack him through an unfair process and expect me to keep quiet," Malema reportedly said.

Malema called Gordhan a "dangerous gangster", according to eNCA.

De Vos speculated that the EFF's financial supporters could be behind their beef with Sars, apart from Malema's personal financial troubles.

"Those who have lots to fear if Sars is rejuvenated (or who gets financial support for themselves or for their political parties from people who have lots to fear from a robust Sars) would obviously wish to discredit the Sars commission to make it politically more difficult for the president to act on its recommendations, assuming that those recommendations – if acted on – will enhance the ability of Sars to go after large corporate interests and wealthy politically connected individuals," wrote De Vos.

"If the public (or at least some gullible leaders within the governing party) could be convinced that the Sars commission was somehow unfair or tainted in any way, the president would find it more difficult to use whatever findings the commission produce, to make sweeping changes to Sars."