FERIAL HAFFAJEE: KPMG's malfeasant role in SARS ruin needs further auditing
As a middle-class taxpayer, I get very little for my taxes. Like our Nigerian counterparts, we are becoming like mini-governments providing for ourselves. At South Africa's personal tax rates, our education, health and security should be taken care of. Yet these are additional costs to a very high tax rate.
This year, the VAT rate is going up, too. Then the Treasury imposes more indirect taxes every year. Plastic bag tax, sugar tax, fuel levy, new excises on supposed luxuries like your phone will all wallop your pocket this year.
The singular genius of Public Enterprises Minister Pravin Gordhan (back when he was the taxman) was to make paying taxes feel like a patriotic exercise, which I came to feel quite proud of doing. He also drove efficiency, so your taxes were settled quickly, and, on the rare occasion when the taxman owed you something, you got paid out speedily.
My last return was efficient, but the system for processing it is in decline if you look at the acerbic reports of the tax ombudsman, Bernard Ngoepe.
Before this decline, the South African Revenue Serviceearned two spots in leading journals as business students were taught the case study of a masterful turnaround from the lumbering and inefficient beast of the old South Africa's Department of Inland Revenue to the post-apartheid slickness of SARS.
Will KPMG get away with its role in denuding the revenue authority of reputation
It was an institution that worked, and worked well. Staffed by a democratic cadre of civil servants, it was a home-grown success story.
Now SARS is flailing. The economy is in the doldrums, which always means the tax take is lower, but revenue fell by R47-billion in the February budget tabled by then finance minister Malusi Gigaba.
This week, the SARS second-in-command, Jonas Makwakwa, quit after a sustained public scandal about money-laundering. The Daily Maverick this week reported that one of the companies found to have paid Makwakwa was on the list of debt collectors SARS has contracted. It's the Achilles heel of government as corruption and mismanagement have an almost immediate effect on tax compliance.
SARS is going to be cleaned up, but will KPMG get away with its role in denuding the revenue authority of skills, talent and reputation? A report by KPMG found, without evidence or investigation, that a rogue unit operated at SARS. The report was used as a battering ram to neuter SARS by shaking out executives whose investigations got too close to cronies and relatives of former president Jacob Zuma.
KPMG carries a huge brand and name for probity, and its imprimatur is power to act. SARS commissioner Tom Moyane has used the report, again and again, to lay charges against Gordhan and the other revenue authority executives he wanted out.
KPMG's role in breaking SARS has not been properly excavated. In February, KPMG paid R23-million back to SARS as it recanted a report it had initially signed. This unit, went the line, was keen to take out Zuma and other political acolytes using illegal intelligence.
The former president was, we now know thanks to Jacques Pauw's book The President's Keepers, a serial tax cheat, but there was never an illegal rogue unit at SARS, and the KPMG report was used to oust a generation of managers there who had managed to turn a tax authority into an instrument of patriotism. It is the single biggest devastation in the armageddon Zuma has bequeathed us. And KPMG seems to think it is off scot-free with the fee return.
The cost to us as a country is much higher. In the February budget, corporations got off with lower tax increases than the rest of us, and that means KPMG, too. I'm left wondering if the company that ruined SARS is effectively paying less of a tax increase than I am - is that fair?