SARS centre scrapping ‘suspicious’

Access to large sums of money for fraudulent purposes could be the reason the leadership at the South African Revenue Service (SARS) dismantled its large business centre (LBC), the commission of inquiry chaired by retired Judge Robert Nugent heard yesterday.

Former LBC head Sunita Manik said these were her suspicions regarding the motivation for the systematic dismantling of the centre in a restructuring process during the term of suspended commissioner Tom Moyane. The restructuring was conducted by consultants Bain at the behest of the SARS leadership.

The destruction of the centre is among the most significant changes brought about by the restructuring – which could have a potentially devastating effect on SARS’s ability to collect revenue from large clients.

Manik told the commission that the LBC concept was best practice around the world and that the centre had been growing steadily until Moyane took office. The centre was run with strong governance principles in place.

No individual could negotiate settlements or refunds with its corporate or high-net-worth clients, who contributed about 30% to SARS’s total revenue collection.

“I think it’s fraud . . . anyone who wants access to large amounts of easy money would target the LBC and tenders,” Manik said.

She described how Moyane and his then deputy had negotiated a settlement with an LBC client which was less than half of the value of what was owed to SARS, a practice which the centre’s governance principles did not permit.

It was subsequently rejected by the settlement committee.

Former SARS integrity unit head Tshebeletso Seremane told the commission that a climate of “fear, harassment, intimidation and bullying” had been pervasive at SARS during the restructuring process. –