Sars loses appeal to install cameras in factories

The South African Revenue Service (Sars) has lost its appeal against an earlier ruling that prohibited it from installing CCTV cameras in tobacco factories to monitor production and curb tax leakage, which is estimated at R20 billion a year.

Earlier this year, Bozza Tobacco and the Fair-Trade Independent Tobacco Association (Fita), representing several smaller tobacco producers, won an interim interdict preventing Sars from attempting to install cameras in tobacco facilities.

Fita argued that this constituted an “unjustified violation of the right to privacy and property”.

The main case against Sars is still to be decided by the Pretoria High Court and may ultimately go to the Constitutional Court for a decision, given the constitutional issues raised by Fita regarding the rights to privacy, dignity and property.

There is also a fear that if Sars is given the right to permanently surveil tobacco producers, it might then impose the same rule on other sectors of the economy known to be tax sieves, such as clothing, gold and fuel.

In its appeal, Sars argued that it needed 24-hour surveillance to counter the illicit trade in tobacco products that has resulted in rampant tax evasion.

Fita responded that the Customs and Excise Act makes no provision for this kind of constant and intrusive surveillance, nor does it empower the Sars commissioner to create new categories of crime as Sars proposed to do in terms of the new surveillance rules under the act.

The Pretoria High Court ruled that Sars had failed to address whether its appeal was in the interests of justice. It had previously been found that Sars had not followed the exact prescripts of the Customs and Excise Act when formulating the rule that would allow it to install surveillance cameras.

The order by Judge LA Retief is in parts scathing of Sars’s approach to the case, in particular its attempt to raise the novel argument that its right to implement the rule should be deemed lawful until the legislation that gives it this right is set aside. -Moneyweb