Picture: Gallo Images
Picture: Gallo Images

President Cyril Ramaphosa has appointed former judge Robert Nugent to head the tax-administration commission of inquiry.

The commission is expected to consider the adequacy and legality of steps the South African Revenue Service (SARS) took to address revenue shortfalls in the past two years, including unauthorised bonuses to top executives and the withholding of refunds to taxpayers.

Public confidence in SARS plummeted on suspended commissioner Tom Moyane’s watch, leading to a R48bn hole in revenue collection. In a statement on Tuesday, the Presidency said Ramaphosa appointed Azhar Bham SC presiding officer in Moyane’s disciplinary inquiry.

Also expected to be included in the tax-administration commission terms of reference is SARS adherence to tax administration processes, including for VAT refunds, mining-rehabilitation funds and adherence to customs and excise provisions particular on tobacco. The commission will look into any change in the operating model on the effectiveness of SARS operations and the integrity of supply-chain management and tendering processes.

The Presidency said the commission was separate from the disciplinary process instituted against Moyane. The inquiry was also separate from the Davis tax committee appointed by the finance minister and which focuses on assessment or recommendations on specific tax policy issues.

Judge Nugent will be assisted by Michael Katz, Mabongi Masilo and Vuyo Kahla.

“The terms of reference for the commission will be gazetted in the coming days,” the president said.

Ramaphosa said his administration had also taken steps to address leadership challenges at SARS, including the suspension of the commissioner, the initiation of a disciplinary process and the appointment of an acting commissioner.

Moyane is due to face a disciplinary inquiry for his handling of the matter of his former second-in-command, Jonas Makwakwa and allegedly misleading Parliament, making unauthorised bonus payments to members of his executive and instructing a SARS official not to co-operate with a KPMG inquiry.

With Linda Ensor and Natasha Marrian

phakathib@businesslive.co.za