South Africa's tax service to take legal action against
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[September 18, 2017]
By Mfuneko Toyana
PRETORIA (Reuters) - South Africa's tax
agency said on Monday it will launch legal proceedings against KPMG for
reputational damage caused when the auditor released details of a
confidential report it had compiled for the tax office.
The legal action is another blow for KPMG, which on Friday cleared out
its South African leadership en masse after damning findings from an
internal investigation into work done for the Guptas, businessmen
friends of President Jacob Zuma.
South African Revenue Services (SARS) commissioner Tom Moyane told a
news conference the agency would report KPMG to Finance Minister Malusi
Gigaba with a view to blacklisting the auditor for its "unethical" and
"unlawful" behavior. It will also ask parliament to investigate the
KPMG was not immediately available for comment.
The global auditor on Friday acknowledged "flaws" in a report that it
compiled for SARS, which implied that former finance minister Pravin
Gordhan had helped set up a "rogue spy unit" when he was head of the
But Moyane defended the report and said KPMG had no right to make
information in the report public or to withdraw parts of the document
without consulting SARS.
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The KPMG logo is seen at the company's head offices in Parktown,
Johannesburg, South Africa, September 15, 2017. REUTERS/Siphiwe
"SARS has been completely taken aback by KPMG's aberrant and unethical conduct,"
he told the televised news conference.
"KPMG unilaterally announced the purported withdrawal of its report despite the
existence of a service level agreement governing the relationship between the
"SARS sees KPMG's conduct as nothing else but a dismal attempt to portray SARS,
its leadership, and in particular (the) SARS Commissioner as incompetent,
corrupt, inefficient and involved in a witch-hunt," Moyane said.
(Additional reporting by Joe Brock, Tiisetso Motsoeneng; Writing by Olivia
Kumwenda-Mtambo; Editing by Catherine Evans)
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