SA ‘lacks strategies to fight illicit trade’
Former Sars COO slams scrapping of modernisation programme under suspended boss Tom Moyane
BARRY Hore, a former South African Revenue Service (Sars) chief operations officer, has lambasted the international IT advisory company Gartner for its failure to consult him about his tax collection strategy before it scrapped it. Hore said that since the scrapping of the modernisation programme by Sars under suspended boss Tom Moyane in December 2014, foreign countries such as the US and international financial institutions no longer consulted South Africa on illicit trade.
He said that during his tenure at Sars – prior to his departure in 2014 – South Africa ranked as one of the top countries on sensitive information on illicit outflows and smuggling, including the identities of syndicates. He said all that came to an end when Moyane appointed and paid Gartner R200 million in 2014 to develop a new IT strategy for Sars.
Yesterday, Hore was making his second appearance before the Nugent Commission, which has been tasked with probing administration and governance at Sars after the appointment of Moyane as commissioner in September 2014.
In 2007, Hore was appointed as the mastermind of the modernisation programme set up by then Sars commissioner Pravin Gordhan. At the time, Hore and his team introduced the e-filing system. He said yesterday the aim was to widen the tax base in the country.
He added that Sars wanted to get rid of a lot of paperwork and to digitise the system.
As a result of the modernisation programme, the number of people and businesses that registered for tax increased substantially including high network people,” he said.
Hore added that the modernisation programme was approved by Sars’s executive council and the National Treasury, which approved the funding. He reiterated that through the modernisation programme, Sars was able to share sensitive information with US and other revenue authorities to prevent illicit crimes.
“The modernisation programme enabled us to collect revenue and to improve services to taxpayers. The auditor-general did not make any finding of irregular expenditure against us on the modernisation programme,” he said.
According to him, the programme was reliable, and international institutions such as the International Monetary Fund trusted their its information.
“Now, since Sars appointed Gartner for its IT strategy, countries such as the US and international bodies no longer consult with Sars,” he said.
He said Gartner had since their appointment failed to develop a revenue collection strategy for Sars. He said the increase in VAT to 15% was proof that the country was lacking in strategies to fight illicit trade.
This was corroborated by Judge Robert Nugent yesterday, who reiterated that there was “something fundamentally wrong with the collection of taxes in the country”. “It could get worse,” he said. Judge Nugent was reacting to criticism levelled against him by Moyane’s lawyer Eric Mabuza, who said his recommendation that President Cyril Ramaphosa urgently fire Moyane was premature, and that he had exceeded his mandate.
The judge said that between 60 to 70 witnesses had appeared before the inquiry and testified that there had been poor revenue collection since a moratorium was placed on the modernisation programme.
The modernisation programme, the commission heard, allowed Sars to register taxpayers and to widen its base including big business and multinationals doing business in South Africa.
Despite the criticism, Judge Nugent was adamant that that was his final recommendation on the matter. He said it was not unusual for a person heading a commission of inquiry to make an interim recommendation and not wait until the conclusion of his mandate.
“I am not going to comment on this when I make my final report in November. That was my final recommendation on Mr Moyane’s fitness to hold office. It is up to the President to accept.”