SOUTH AFRICAN REVENUE SERVICE
MEDIA RELEASE NUMBER 22 OF 1999

22 SEPTEMBER 1999

The South African Revenue Service (SARS) has noted, with concern certain advertisements by Metro Cash & Carry in the press, which appeared on 22 September 1999 under the heading "Setting the record straight". SARS considers it appropriate, under the circumstances, at this point to state only the following:

The allegations made in the advertisements are the subject of two court cases, respectively in the High Court of the Witswatersrand Local Division and the High Court of the Transvaal Provincial Division. There is also the possibility that these allegations will be the subject of proceedings in the Special Income Tax Court. The allegations made by Metro Cash & Carry will be tested in the appropriate courts. SARS therefore does not consider it proper to comment on the merits of the matter, which is, and continues to be the subject of court proceedings. That, in SARS view, will be the proper occasion to "set the record straight". SARS, as it is required to do, will make full disclosure of its case in an open court.

The secrecy provisions of the Value Added Tax Act, 89 of 1991, furthermore, bind SARS to treat the tax affairs of vendors, such as Metro Cash & Carry, as confidential. Notwithstanding grave provocation, SARS will not disregard this duty. It is, however, Metro's prerogative to allow SARS to publicly disclose its tax affairs, by way of waiving its rights in terms of the secrecy provision of the VAT Act. This will ensure, where necessary, that an even handed-public debate occurs without hindrance.

SARS, however, welcomes Metro Cash & Carry's readiness to produce evidence in court. That evidence could have been produced at an earlier stage by Metro, but it chose not to do so. Once again, it is Metro's decision as to when to make available such evidence.

SARS strongly disputes the accusations of high handedness and bullying, or of self-interest influencing the course of its investigations. Furthermore, SARS reiterates its open door policy for purposes of discussions with any taxpayer. It is the stated policy of SARS to be accessible to taxpayers and it invites frank discussions between it and taxpayers at any time. SARS has in fact met with a director of Metro Cash & Carry and several of its representatives in June of this year. Subsequently, Metro Cash & Carry had various meetings with SARS. These proved to be fruitless.

SARS and its representatives reserve their respective rights, on which they will seek appropriate advice.

ISSUED BY THE ACTING COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA



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