Sweep out the Moyane cronies
If new SA Revenue Service (Sars) boss Edward Kieswetter wants to fix the tax agency the first thing he has to do is remove those linked to Tom Moyane. Kieswetter has predictably been subjected to a backlash from the EFF, a reminder that he will need a thick skin. He is a former deputy to Pravin Gordhan during his time as commissioner when Trevor Manuel, who was tasked with chairing the committee looking for Moyane’s successor, was finance minister.
The EFF’s line of attack included the charge that Kieswetter was at Sars when the so-called rogue unit, a narrative that has been discredited, was established. It’s not unthinkable that many of those who drove that story, which destabilised and weakened the institution, are still there and are working against change.
The EFF’s interest in the dealings at Sars took a more definite turn after Moyane, who was seen as a staunch Zuma ally, was fired by President Cyril Ramaphosa in November.
Moyane’s axing was in line with recommendations by retired judge Robert Nugent, who headed a commission of inquiry into the institution’s governance failures, which were partly blamed for revenue shortfalls that caused the country to be subjected to a VAT increase in 2018 for the first time in a quarter of a century, adding to hardship for the poorest in society.
While Sars veteran Mark Kingon, who has been acting commissioner since Moyane’s suspension and firing, seems to have made some changes such as reinstating the big business centre and the tobacco task team, he has done little to weed out those who were aligned to Moyane.
Kieswetter has already alluded to the fact that he will restructure the team at Sars, and that can’t come soon enough. At a briefing on Thursday following his appointment, he said he would “start working immediately to identify those who are likeminded and aligned”.
He goes into an organisation that has been decimated over the past few years, is still in limbo and where morale is understandably low.
Just last week, Sars employees embarked on a nationwide strike, the first in almost a decade. On Thursday, most contact centre staff left taxpayers waiting on telephone lines on deadline day for the 2018-19 financial year. More than half of the walk-in branches were closed on Thursday, while some were still affected on Friday. The strike action was expected to continue into Monday, coinciding with the release of preliminary results of revenue collection for 2018-19. Getting this resolved should be on top of the commissioner’s “to do” list.
In recent years, the performance of Sars hasn’t made for pretty reading, in contrast to the days when Kieswetter was there. It’s hard to believe that there was a time when the institution was regarded as being among the best in the world. It overshot its collection targets and Manuel was able to reward taxpayers with lower bills. In fairness, the economy was much healthier then, and that was before the global financial crisis that also played havoc with our economy.
The point is that while other economies recovered from the crisis, we continued to stagnate, and mismanagement at Sars made a bad situation worse. It’s a legacy that we are still struggling with. For 2017-18, tax compliance remained at record lows, while the tax authority fell short of its revised revenue target. Sars collected R1.216-trillion that year, which was R700m, or 0.06%, short of the revised estimate of R1.217-trillion announced in the 2018 budget.
Finance minister Tito Mboweni said in his budget speech in February that the projected tax revenue for 2018-19 would be R15.4bn lower than the R1.3-trillion pencilled in during the medium-term budget policy statement in October.
Monday’s preliminary results will show SA and the new commissioner exactly how dire the picture is. And the sooner the clean-up starts the better. He’s not there to make friends.
THE SOONER THE NEW SARS COMMISSIONER STARTS THE CLEAN-UP THE BETTER