DA's inspection shows bribe-taking at CIPC and SARS
21 August 2014
On Friday 15 August, the Democratic Alliance conducted an unannounced oversight visit to the Companies and Intellectual Property Commission (CIPC) head office and customer walk-in centre in Sunnypark in Pretoria. We wanted to see for ourselves how prevalent the problem of so-called 'runners' is, following many reports from businesspeople who have written to us.
The ‘runners' often extract significant sums of money from members of the public by offering to circumvent the Commission's normal registration procedures.
After the visit, we can report that the problem is far more serious than first thought.
The situation requires investigation and intervention by the Department of Trade and Industry, the management of the CIPC, and the management of SARS. These agencies should co-operate in a joint operation to find, charge and dismiss corrupt officials.
Within seconds of arriving at the CIPC, we were approached by a ‘runner' who offered to process company registration, name reservation and tax clearance on our behalf - for a fee of R1200 - and all within 3 days. At a price of R1 800, the entire process could be done in one day. When we asked how this was possible, the response was alarming: "the people inside here (referring to CIPC staff) work for money. If you have enough money, you can get anything you want".
The runners confirmed to us several times that they have an arrangement with staff inside the CIPC and SARS in which the fee is split with them in exchange for processing the work faster. This is simply bribery, and it is not acceptable.
Perhaps even more alarmingly, runners even offered to process VAT registration for a larger fee. VAT registration is a lengthy process and requires businesses to have a bank account with at least a R50 000 balance at the time of registration. But the runners are able to skip all of these important checks and balances, opening the way to significant VAT fraud. This suggests staff at the SARS are also accepting these bribes.
Earlier this month the DA raised this problem in the Portfolio Committee on Trade and Industry. Following our visit, we believe that the CIPC, SARS and the DTI need to co-operate on a joint operation to root out these corrupt officials. As we did last Friday, it should be possible to use undercover officers to pay the runners and then trace which officials are assisting them.
Businesspeople should know that the use of these ‘runners' is supporting bribery and corruption in government. In turn, the CIPC must improve its service and processing turnaround times to diminish the incentive to make use of runners. This problem can no longer be brushed aside as a minor issue - it is corruption, and it must be rooted out.
Statement issued by Geordin Hill-Lewis MP, DA Shadow Minister of Trade and Industry, August 21 2014
Click here to sign up to receive our free daily headline email newsletter
