In certain countries around the world, citizens pay relatively high taxes, but they don’t seem to mind.
That’s because those taxes are used wisely, providing things like healthcare and free education and top-notch infrastructure.
Then there is South Africa, where SARS has been torn apart from the inside out, with suspended commissioner Tom Moyane leading the way.
When future generations look back at State Capture (they’ll still be feeling the effects), names like Zuma and Gupta and Zwane will stand out, but they should also remember Moyane.
Judge Robert Nugent [below], during the Nugent Commission of Inquiry, has recommended to President Cyril Ramaphosa that Moyane “be removed from his position immediately”, spelling out just how disastrous his reign has been.
This from Fin24:
“The day Mr Moyane took office was a calamity for SARS. Almost immediately, and then continuously for the next 18 months, SARS was thrown into turmoil, with tragic consequences for the lives of many people, tragic consequences for the reputation of SARS, and tragic consequences for the country at large,” the interim report read.
The presidency has said that Ramaphosa is “applying his mind” to the report, which according to the commission states that SARS “reeks of intrigue, fear, distrust and suspicion”. The report has been furnished to Moyane for comment.
My guess is that Tom will remain pretty quiet, with the commission due to wrap up in December.
Here are seven ‘highlights’ from the Nugent report.
Moyane has not been supportive of the inquiry
Since the inception of the inquiry, Moyane “has remained in the shadows”, the report read. The commission has noted that Moyane had only attended the hearings for a few hours, and only with the intention to disparage and derail its work.
Over the period Moyane has brought forth an application to have the commission’s work halted, and most recently he has sought intervention from the Constitutional Court.
The commission has also noted that although Moyane’s attorney has been alerted of the public hearings, neither he nor Moyane have attended. Moyane had also been invited to make written submissions to the inquiry, but has not done so.
No surprises there.
The current state of SARS is disturbing
Based on the evidence collected so far, the commission believes the state of SARS to be “disturbing” and to the detriment of its revenue collection abilities. “Urgent intervention is required if the ongoing loss is to be arrested,” the report read.
The commission acknowledged the work of acting commissioner Mark Kingon to address concerns, but has stressed SARS can only be best served with “long-term certainty and stability”.
The commission also raised concerns that SARS’s senior management “sat back” while the tax agency’s reputation was tarnished and its staff “demoralised”.
Then there’s the matter of the estimated R1 billion needed to fix the SARS e-filing system, which is on the brink of collapse.
Moyane strategically undid the progress made by the agency
Before Moyane was appointed as commissioner, SARS had earned accolades domestically and abroad. But Moyane has stopped the drive to modernise systems, and other units such as the Large Business Centre needed to service corporate taxpayers and units countering illicit trade are now ineffective.
Under Moyane, restructuring had been implemented, which displaced almost 200 managerial employees.
It’s been dubbed the SARS ‘brain drain’, where knowledgeable employees were ousted and replaced with those willing to bury their heads in the sand.
Relations between Moyane and other economic bodies are strained
The commission described the relations between Moyane and state institutions such as National Treasury, the Auditor-General, the Davis Tax Committee, and the Financial Intelligence Centre as “icy”. SARS also no longer carries the high status it used to among international bodies.
SARS was brought down by Sunday Times reports on the ‘rogue unit’
The commission said that SARS has been brought to its present condition through the consequences of the Sunday Times report on the so-called “rogue unit”.
“I have not yet found why the creation and existence of the unit was said to have been unlawful, which is how it was consistently and uncritically depicted,” Nugent said in the report.
Nugent said that the report and others that followed, did “immeasurable damage” to SARS and the lives of many others.
The Sunday Times may have recently issued an apology about running the “rogue unit” story, but the damage has been done, lives have been ruined, and an institution has been gutted.
Who fed the journalists these lies? South Africans deserve to know.
Anyway, back to Moyane and how he used those false reports to his advantage.
Moyane used the report as a basis to disband the SARS executive committee, this shortly after he was appointed in 2014. “All that on the basis of no more than a newspaper report and moreover, a report on events of which at least most of the chief officers could not be expected to have had any knowledge,” Nugent said.
Later that year, Moyane disbanded the high risk investigative unit without creating new capacity to continue its work.
In December 2014, Moyane then commissioned the services of KPMG to investigate the rogue unit and Bain and Company was appointed to review SARS’s operating model.
Ah yes – that brings us to the sixth point…
Bain appointment was questionable
Questions have arisen of the appointment of Bain. “For the present it is sufficient to say that the arrival of Bain brought its own turmoil,” Nugent said.
Bain devised a new operating model for SARS, and a new executive committee was appointed in 2015. At this point, SARS had lost its core management, experience and skills. “By the middle of 2017 nothing was left of the exco that had existed when Mr Moyane took office,” the report read.
The commission noted that some of the new appointees had no experience in tax collection and institutional memory had been entirely eradicated within the executive committee.
So, what the bloody hell happens now? Rather obviously, governance at SARS must be addressed
Nugent said that based on what has happened at the agency under Moyane’s tenure, it is important to have “material legislative changes” to improve governance at SARS, to avoid this from happening again…
He added that checks and balances must be put in place to ensure the commissioner is accountable to the finance minister and that SARS cooperates with other State institutions.
“No responsible leader of a major and complex organisation would have acted as Mr Moyane did, with lasting impact on the current state of SARS,” Nugent said in the report.
Moyane effectively turned a world-class organisation upside down.
To finish, the real body blow:
SARS is now “wracked with intrigue, suspicion, distrust, and fear of senior management; information technology that is in decay; a fragmented structure that inhibits collaboration amongst functions to the detriment of revenue collection; a space for the illicit trade to flourish; loss of long-serving skills; skilled and experienced personnel in supernumerary positions doing little if anything at all; and revenue collection compromised”, Nugent said.
Sheesh, Judge Robert, tell us how you really feel.
There you have it – that’s the current state of SARS for you, with Tom Moyane yet to be sacked.
I’m probably not reading the room well here, but a reminder that you have two weeks left to file your taxes.
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