Progress toward prosecutions over damage to Sars, says Treasury

THERE is good progress under way in criminal investigations stemming from the damage wrought on the South African Revenue Service (Sars) during the Tom Moyane era, National Treasury deputy director-general Ismail Momoniat said yesterday.

“In the last few months we have had very positive interaction with the Hawks and the NPA. I have a sense that there is movement and I feel a bit positive that something will happen,” Momoniat told Parliament’s standing committee on finance.

The Nugent Commission of Inquiry into Tax Administration and Governance at Sars recommended that criminal charges be pursued over the awarding of a contract, under axed former commissioner Tom Moyane, to Boston-based consultancy Bain & Company, that developed a flawed operating model for Sars. The operating model resulted in a loss of R100 billion in revenue and severely compromised the tax collector’s reputation.

Momoniat said the tax service still had some way to go in repairing the damage and restoring collection levels, telling the committee: “It will take Sars at least two years to be in a decent space.”

Momoniat said Sars itself has done a lot of “follow-up” in terms of assisting with the investigations by providing these law enforcement agencies with information and affidavits.

This included information about Moyane and the former head of business and individual taxes, Jonas Makwakwa.

He said as a layman, he had no doubt that Boston-based consultancy Bain & Company, which conceded its role in developing a flawed operating model for the revenue service under Moyane.

Momoniat also suggested that there was a consideration to restrict Sars’s use of international consultancies on the whole, following the debacle.

“We are also talking to the agency to review any consultancies they have in terms of resources,” he said.

Sars Commissioner Edward Kieswetter said yesterday that where criminal conduct was suspected relating to matters of Bain & Gartner, these had been referred to the Directorate for Priority Crimes Investigation (Hawks) for criminal investigation.

He said Bain had paid back the R217 million to Sars. However, IT consultants Gartner had declined to do the same, despite several engagements.

“Owing to the way in which these companies conducted their business activities, consideration should be given to placing them on a restricted suppliers list.”