CRACKING THE WHIP: SARS has become stricter on refunds as it cracks down on fraud relating to input claims and fictitious invoices. Picture: TYRONE ARTHUR
CRACKING THE WHIP: SARS has become stricter on refunds as it cracks down on fraud relating to input claims and fictitious invoices. Picture: TYRONE ARTHUR

The SA Revenue Service (Sars) has kicked off a process to reinstate about 200 employees with experience running into ‘‘thousands of years’’, who were displaced due to the destructive overhaul of the tax agency's operating model. 

This is according to acting commissioner Mark Kingon, who delivered an emotional apology to the people of SA on Friday for the deep crisis at the tax agency over the past four years. He was testifying before the commission of inquiry on administration and governance at Sars, chaired by retired judge Robert Nugent. 

Kingon was moved to tears as he gave evidence at the inquiry about the dire state of affairs at Sars in recent years. He spoke about the atmosphere of mistrust, fear and intimidation, afflicting even its highest leadership structure, which resulted in a massive staff exodus and the demoralisation of employees at the tax agency. 

I would like to say sorry on behalf of Sars leadership, I would like to say sorry to the president, the minister of finance former officials and their families for the fear and the pain they were put through.
Ácting Sars commissioner Mark Kingon

Kingon was appointed to act in the position when President Cyril Ramaphosa suspended commissioner Tom Moyane in March. Kingon's acting post has been renewed since then and he has about 60 days left at the helm. According to the Sars Act, an acting commissioner can only remain in the post for 90 days at a time.

Nugent has recommended in his interim report that Ramaphosa fire Moyane and appoint a permanent commissioner without delay in order to stabilise Sars. 

Kingon acknowledged the damage to the institution's standing, and apologised to former officials and their families for the pain and fear they were subjected to in recent years. Addressing how SARS was moving to restore its credibility and functioning, Kingon said a process has been initiated to match the skills of these officials with key positions in the institution.

The commission has previously heard harrowing testimony of how skilled, experienced employees were harassed, intimidated and purged from the institution or moved to redundant posts in which they did nothing. Many remain in these ‘‘specialist’’ or ‘‘generic specialist’’ posts to this day. This was brought about through the overhaul of the Sars operating model by Moyane who, with the help of consultancy Bain, restructured the tax agency — a move that effectively neutralised key functions and severely affected its capacity to deliver on its mandate. 

Kingon appealed to his colleagues at Sars to work with him during the restoration process. He also said that in addition to addressing employee-related issues created by the restructuring, he was restoring key units decimated in the process. This included the large business centre, the compliance unit and the litigation unit. He has embarked on a process to revive the institution's IT capacity, which was severely damaged when the Sars modernisation process was halted by Moyane. 

"We've missed them," Kingon said, referring to the highly skilled individuals at Sars who until now were effectively idle within the institution or had left. 

Kingon also reinstated the unit aimed at tackling the illicit economy, previously dubbed the ‘‘rogue unit’’.  Reports on the alleged unit were at the heart of the hollowing out of the tax agency. 

‘Done’ with ‘rogue unit’

The rogue unit narrative has since been discredited and Kingon said on Friday that while there may have been rogue elements in the unit, he was ‘‘done’’ with story and no longer pursuing it inside Sars.

This is after evidence leader advocate Carol Steinberg read out a letter from attorneys for head of human resources at Sars, Luther Lebelo, to the commission questioning why it did not hear evidence on the unit. 

Nugent said he had not denied one individual the opportunity to give evidence to the commission since its inception. 

Steinberg also disclosed that Lebelo had Sars foot the bill for lawyers to prepare him for when he gave evidence to the inquiry in the last round of public hearings, to the tune of nearly R1m. She asked Kingon whether he was aware of this, to which he replied that he was not.

Lebelo had asked the lawyers to gather all evidence on the rogue unit so that he could present it to the commission. He had not presented any such evidence during his testimony in September, but he is expected to return to make submissions next week after being subpoenaed by Nugent. 

While changes are being made to repair Sars, the situation remains dire, with about 90 very experienced individuals on the verge of retirement and budget constraints to properly restoring the functioning of the institution.

MarrianN@Businesslive.co.za

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