Natasha Marrian Political editor: Business Day
Picture: GALLO IMAGES
Picture: GALLO IMAGES

The credibility of the SA Revenue Service (Sars) is still at risk, unless the institution is depoliticised, the Sars commission of inquiry has found and recommends that any new commissioner appointed should be "apolitical".

The commission, chaired by retired judge Robert Nugent, has made far-reaching recommendations to bolster governance at Sars, including the appointment of an inspector-general, a deputy commissioner and for the oversight powers of the finance minister over Sars to be strengthened. 

Nugent was tasked with investigating governance and administration at Sars by President Cyril Ramaphosa after a R100bn hole in revenue collection developed since former Sars commissioner Tom Moyane took over in 2014. Nugent in his final report handed to Ramaphosa on Friday found that the situation at Sars under Moyane  was a “catastrophe”.

The final report said that this situation was “attributable to a massive failure of governance, coupled with pervasive breaches of integrity” at the tax agency since 2014. 

Without that politicisation being rooted out of SARS, there is no prospect of its credibility being restored
Final report by SARS commission of inquiry chairman Judge Robert Nugent

“It has become perfectly clear in the course of this inquiry that Sars is still plagued by factional politicisation and intrigue that entered SARS with Mr Moyane’s appointment and it is set still to plague Sars. Without that politicisation being rooted out of Sars, there is no prospect of its credibility being restored,” Nugent says in his final report. 

In the end, he recommends that a new commissioner be appointed in a “transparent” process, to be led by the president, in consultation with the finance minister. 

The National Treasury has already got the ball rolling, with the post of commissioner advertised over the weekend. Treasury deputy director-general in charge of tax policy, Ismail Momoniat, said on Monday that the recommendations of the Nugent report would be factored in when making the new appointment. 

The term of acting commissioner Mark Kingon has been extended by the treasury to allow for this process to take place. Nugent recommends that the new commissioner should have “unblemished integrity”, can manage  large organisations  — SARS has 14,000 employees — and should also “not be aligned to any constituency”.

“And, if so aligned, (the candidate) should renounce such alliance upon appointment,” the report says. A panel should be appointed to interview candidates nominated by the president. 

Nugent’s report also contains other far-reaching recommendations on improving governance and functioning at Sars in the medium term, including  restoring key units such as the large business centre and the compliance unit, and for Sars to reestablish its capacity to investigate the illicit economy, especially the illicit tobacco trade. Its capacity to do so was diminished during Moyane's tenure. 

The recommendations also include recouping about R900,000 from Moyane for legal bills which Sars had to bear for his own personal benefit — he had paid lawyers R120,000 and R770,000 to read two books for him to establish whether he had been defamed.  

marriann@businesslive.co.za