Sars after Moyane: ‘apolitical’ tax boss wanted
Four people are said to be frontrunners, but an official denies this, insisting Nugent’s guidelines will be followed strictly
The SA Revenue Service (Sars) commission of inquiry has recommended a host of measures to ensure that the tax agency is never again "seized" by a leader who "lacked integrity", like axed commissioner Tom Moyane.
The commission, chaired by retired judge Robert Nugent, submitted its final report to President Cyril Ramaphosa last month.
It recommends far-reaching legislative and governance changes — and these proposals are to form the basis of the process that has now started to appoint a successor to Moyane.
The post of commissioner was advertised over the weekend and contenders will be shortlisted in January. Nugent’s recommendations aim to ensure a transparent process for the appointment of the new commissioner who, he says, should be "apolitical".
The FM understands that the names of at least four individuals to replace Moyane have been raised: former auditor-general Terence Nombembe; former Sars senior executive Nathaniel Mabetwa; former Sars COO and former Alexander Forbes CEO Edward Kieswetter; and former Sars deputy commissioner Ivan Pillay.
But a senior government official says the stringent guidelines suggested by Nugent for the appointment leave the race wide open.
What Nugent proposes is the professionalisation of the appointment process, to ensure that the new Sars boss is insulated from political influence.
"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," he says in his report.
He adds that Sars under Moyane was a "catastrophe" because of "massive failures of governance", coupled with pervasive breaches of integrity".
Nugent recommends that the new commissioner should have "unblemished integrity", have the ability to manage large organisations — Sars employs 14,000 people — and should "not be aligned to any constituency".
Two new posts might be created to tighten oversight of the agency: an inspector-general and a deputy commissioner, to be appointed by the president.
Nugent also recommends that the reporting lines of the commissioner to the minister of finance be strengthened, though he steers clear of returning responsibility for the appointment of the commissioner to the National Treasury. The appointment should instead be made by the president in consultation with the finance minister.
Ramaphosa has a huge task in making this appointment, as the new tax commissioner has to restore the agency to the efficient unit it once was, before Moyane brought it to its knees, culminating in a R100bn hole in revenue collection.
It is unlikely to be an appointment made lightly, particularly as the Moyane faction inside and outside Sars continues its fightback.
Ramaphosa’s pick will need steely resolve to withstand an onslaught from delinquent taxpayers, organised criminals and players in the illicit economy, particularly in the tobacco trade, which benefited from the weakening of the tax agency.
Sars was among the first institutions captured through a concerted attack on a number of fronts, which included state security and the tobacco industry in cahoots with powerful politicians.
The fallout of the capture of Sars continues to claim victims. Bain & Co, the consultancy at the heart of the Sars restructuring which neutralised its capacity, "parted ways" with its head of SA operations, Vittorio Massone, in November. Bain has paid back the money it earned from the illegal contract it won from Sars, amounting to R217m. Nugent has recommended that fraud charges be brought against Bain over the dodgy contract.
IT consultancy Gartner was not spared either. The commission found that Sars paid over R200m to the firm for work which its own representatives described as "worthless". The Gartner mess just about crippled Sars’s infotech infrastructure, with the eFiling system at risk of collapse in two years if there is no concerted intervention.
Moyane’s abrupt halting of the decade-long Sars modernisation programme shortly after he took over set the tax agency back; senior officials say it will take about R1bn to get it on track again. This will be a priority for the new commissioner.
Nugent’s report also contains far-reaching recommendations on improving governance and operations at Sars in the medium term, including restoring key units such as the large business centre and the compliance unit, and for Sars to re-establish its capacity to investigate the illicit economy, especially the illicit tobacco trade. Its capacity to do so was diminished during Moyane’s tenure.
Politics poisoned Sars. To secure government finances, it is critical that political agendas be extricated from the agency’s DNA by appointing a neutral commissioner and cleaning out the remnants of Moyane’s project.