A landmark case in the Constitutional Court last week makes it clear that the SA Revenue Service’s (Sars) long-established prohibition on disclosing any details of taxpayers’ affairs cannot be absolute.
That potentially opens the way for details of former president Jacob Zuma’s tax affairs to be disclosed to the media, if he indeed dodged his tax obligations as alleged.
The news is sure to be widely welcomed, not just by journalists but by citizens who might at last find out what the former president was up to. They might even get an inkling of whether he captured the tax authority itself to ensure it did not go after him or others involved in corruption and state capture. The ruling might open the way for their tax affairs to be made public too.
The freedom of expression enshrined in SA’s constitution and its free, fearless and robust media are hallmarks of its democracy, distinguishing it from many other emerging markets. To the extent that the May 30 Constitutional Court judgment supports freedom of information in the public interest, specifically regarding reporting contraventions of its tax laws by public office-bearers and politicians, it is exciting news.
Given the daily diet of news about the crime syndicates and corruption destroying our economy, we would all like those responsible to fear finding the details of their dodgy financial and tax affairs on the front pages of our newspapers.
Crucial too is that the judgment allows disclosure of people’s tax affairs only in very limited circumstances, specifically where there have been “substantial contraventions” of the tax legislation and it is in the public interest to permit these to be public.
But take a step back and the judgment could be bad news for the Sars and its ability to collect taxes and ensure voluntary compliance by taxpayers. It could also be bad news for anyone in the public eye, journalists included.
The court has again intervened to instruct parliament that it needs to change the law, as it has done in the past. In this case it is disclosure provisions of the tax and protection of information legislation that have been found to be unconstitutional and must be changed within two years.
Meanwhile, Sars has been given the task of deciding when to disclose information if anyone demands it on public interest grounds. The definition of whose information and when to disclose it has been left extremely wide: “In circumstances where such disclosure would reveal evidence of a substantial contravention of the law and would be in the public interest”.
One does not envy Sars having to decide which applications meet the test for the “public interest override” of the secrecy it has always guaranteed taxpayers, whoever they might be. If it faces a deluge of applications and says no, it is likely to be spending a lot of time and resources litigating court challenges. As if it does not have other things to do such as collecting taxes, while it is still rebuilding the tax authority and fixing the damage done by the state capture years, and in a weak economy that puts taxpayers under pressure and makes compliance more difficult for Sars to achieve.
Still, the court did find that the relevant legislation is unconstitutional in broad terms because it should not have provided for absolute secrecy in all circumstances. It certainly is better that legislators in parliament should address this — bouncing it back to Sars meanwhile — than that the judges themselves should decide.
Parliament’s democratic processes allow for experts to weigh in on what the legislation should look like, to balance the need for taxpayer confidentiality and trust in Sars with the right of the public to know, under circumscribed and clearly defined public interest circumstances.
Trouble is for the next two years at least the court has left huge uncertainty over what those “substantial contraventions” might be that would justify Sars overriding its own secrecy provisions, and who might rate as being the kind of person — in the public or private sectors — whose affairs might be deemed to be in the public interest.
Arena Holdings, which owns Business Day, was one of the applicants to the court, with investigative unit AmaBunghane and a former Business Day journalist, Warren Thompson. Their application for information on Zuma’s tax affairs was premised on allegations of wrongdoing in Jacques Pauw’s book The President’s Keepers, as well as other allegations. They won their case in the high court and approached the apex court to confirm it.
The court has now left it in Sars’ hands to decide whether to release the information. Now to see what it does next.
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