Various companies won tenders to supply government with COVID-19 personal protective equipment (PPE) even though they were not in the PPE business, SA Revenue Service (SARS) Commissioner Edward Kieswetter has said.
Kieswetter was briefing Parliament’s Standing Committee on Public Accounts (SCOPA) on Friday when he made the revelation.
He said, “You would be surprised to know that many companies [that won PPE tenders] were previously registered, but they were not in the PPE business.
“We found providers that are registered as pubs, IT companies, car-washing companies, property-letting companies, bakeries and event-management companies have all been successful notwithstanding their experience in providing PPEs to government.”
Politically exposed persons
Kieswetter added that 17 of those tenders involve politically exposed persons and have a total value of R1.2 billion, which represents 60 percent of the R2 billion in tenders that are under investigation. “One company is owned by a 30-year-old that has received a contract worth R125 million,” the Commissioner said.
He said SARS has received a request from the Special Investigating Unit (SIU) to investigate 300 PPE cases. SARS has earmarked 139 of these companies for potential tax evasion investigation and initial indications are that 63 percent of them are not tax compliant.
“Of the non-compliant [companies], it’s all kinds of shenanigans that have been played – not declaring income from PPE [contracts], outstanding tax returns, incorrect or fraudulent tax returns, and [some] are not registered for VAT,” Kieswetter said.
SCOPA also received a presentation from the Department of Justice and Constitutional Development led by Minister Ronald Lamola and Acting Director-General Kalayvani Pillay.
Inter-ministerial committee
Lamola emphasised that the inter-ministerial committee appointed recently by President Cyril Ramaphosa to deal with alleged PPE procurement will not usurp the work of law enforcement agencies or Parliament’s oversight role.
Instead, it will “enhance” their work by coordinating the collection and publication of all procurement information. It will also “develop measures on how to strengthen the capacity of the state to ensure that the systems and structures engaged in the fight against corruption are not undermined,” Pillay added.
Some of the information the committee has collected has already been published on the National Treasury website and can be accessed here. The information is drawn from both national and provincial departments and entities.
SCOPA also received input from the SIU, National Prosecuting Authority and Directorate for Priority Crime Investigation (Hawks).