Economy hit hard by Sars looting
Uncollected millions could have been used for people – Saftu
FOLLOWING the suspension of commissioner Tom Moyane this week, more should be drawn from investigative journalist Jacques Pauw’s book, The President’s Keepers, say commentators on the goings-on at the SA Revenue Service.
Moyane was depicted a rather unflattering way Pauw’s book.
“What Tom Moyane did at Sars,” wrote Pauw, “must count as one of the most brutal institutional interventions in democratic South Africa.”
The SA Federation of Trade Unions (Saftu) said Sars had become a key and vital player in the state capture project.
Saftu said this was one of the areas in which the looting spree most directly affected the economy and the people as a whole.
As Pauw revealed in his book, “in the 2016/17 tax year, Sars reported a R30 billion shortfall, the first time since the worldwide recession in 2009. Parliament heard in September 2017 that for the first quarter of the 2017/18 tax year, Sars had already recorded a R13 billion shortfall. Sars was expected to miss its overall target for the tax year by about R50 billion”.
“If that missing R50 billion had been collected it could have been spent on improving education, healthcare and other vital services and made a massive improvement in the lives of poor South Africans,” Saftu acting spokesperson Patrick Craven said.
In a Facebook post on Tuesday, Pauw said Moyane had gone a long way in breaking the country’s most crucial public institution.
“Moyane is corrupt and has no tax knowledge. This was arguably Zuma’s worst appointment ever,” Pauw said.
He also listed Moyane’s “achievements” as he stopped the tax investigation into Zuma, Edward Zuma, Khulubuse Zuma and the Guptas.
Part of the “achievements” was Moyane’s decision to disband all five investigations units at Sars, leaving the service “toothless”.
“He drove a host of dedicated and skilled civil servants from Sars. He failed to collect at least R1 billion in taxes from Chinese criminal in in Robert Huang. He failed to collect R288million in taxes from Cape gangster Mark Lifman. He failed to collect R600m in taxes from smuggler Adriano Mazzotti.
“Sars recorded a R50 billion shortfall in the last tax year. He failed to investigate his No 2, Jonas Makwakwa, for money laundering.
“He has laid criminal charges against me for revealing his dirty linen in The President’s Keepers and has brought a High Court application against me,” Pauw wrote.
Moyane was suspended with immediate effect pending the institution of disciplinary proceedings against him.
Deteriorated
In a letter to Moyane, President Cyril Ramaphosa said he lost confidence in his ability to lead Sars, adding that protecting Sars and, by corollary, the public interest was his primary concern.
“Developments at Sars under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen,” Ramaphosa wrote.
He listed two areas of concern with regard to Moyane’s conduct and performance of his duties. He referenced in particular the manner in which Moyane handled the matter of Jonas Makwakwa, who resigned last week, “his treatment of the report given to him by the Financial Intelligence Centre, and his failure to immediately report this to the Minister of Finance”.
The other area of concern was the management of VAT refunds, which brought Sars into “serious disrepute” and potentially jeopardised the integrity of Sars adversely affected tax morality among taxpayers.
“You have not been willing to acknowledge your failures or the magnitude of the consequences of your action,” Ramaphosa wrote, saying he therefore had “no choice” but to suspend Moyane.
Ramaphosa announced a commission of inquiry into the leadership of the tax agency during his State of the Nation Address in mid-february.
DA shadow deputy minister of finance Alf Lees said the decision to suspend Moyane was long overdue “given the destruction of the reputation of Sars while under his leadership”.
Lees said the next Sars commissioner should be an individual with a proven track record in tax administration and financial management with their immediate task to oversee a restoration of taxpayer morality and improvement in tax revenue collections.
“The DA looks forward to a full implementation of a turnaround strategy at Sars, spearheaded by a qualified commissioner,” Lees said.
Mark Kingon, who has worked at the tax agency for 34 years, is now acting in Moyane’s position.
He is reportedly known as a tax veteran who worked under Pravin Gordhan and has occupied various roles within Sars operations, including Legal Interpretation, Enforcement, Business Systems and Operational Support.
Chief executive of the Organisation Undoing Tax Abuse (Outa), Ben Theron, said: “The fact that he has gone allows the staff at Sars a level of breathing space. Moyane decimated the tax investigative unit.”
Theron said Sars was probably the only tax collection unit in the world that does not have a tax investigation unit, accusing Moyane of collapsing it.
“There is no one doing tax investigations. We are now reactive when it comes to tax collection as opposed to being proactive.”