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Gordhan says new South African Revenue Service probe may be case of obfuscation

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Gordhan says new South African Revenue Service probe may be case of obfuscation

Photo by Duane Daws
Former Finance Minister Pravin Gordhan

8th November 2017

By: African News Agency

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Former finance minister Pravin Gordhan on Tuesday said the inquiry into tax collection and governance at the South African Revenue Service (Sars) announced by his successor Malusi Gigaba risked obfuscating rather than resolving problems at the entity.

“It could be a case of delaying dealing with the issue and obfuscating it. I think you just need to replace a few people and confidence will be restored,” he said on the sidelines of the parliamentary probe into Eskom.

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Gordhan went on to add that he included Sars commissioner Tom Moyane in the list of those who should go.

“He is not a fit and proper person to head a revenue administration,” he said.

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“Unless we see any changes in the leadership at Sars I don’t see any improvement.”

Gigaba announced on Tuesday, that President Jacob Zuma has agreed to establish a commission of inquiry as a matter of urgency. He said he had informed Moyane who expressed his support and willingness to cooperate.

“We expect this inquiry to be constructive and to strengthen the institution further where possible. It is critical for government to determine the cause of the tax revenue under-collection in order to enable government to take urgent remedial steps to ensure that Sars is able to meet its revenue targets as set out in the Medium Term Budget Policy Statement (MTBPS) and budget,” Gigaba said.

The MTBPS projected a tax revenue shortfall of R50-billion in the current financial year.

“The inquiry will help to assess what factors are responsible for the under collection of revenue by Sars, and what steps need to be taken to improve performance management systems at Sars to improve its capacity to collect revenue,” Gigaba said.

“The MTBPS recognised that whilst the economic cycle is the most likely and significant factor driving lower revenue-collection, other factors could also be at play, like weakening tax morality and challenges facing tax administration.”

The announcement of the inquiry follows more political upheaval around Sars last month when auditing firm KPMG said it was withdrawing its report into a so-called “rogue” intelligence gathering unit within the revenue service.

Claims that the unit operated outside the law formed the basis of a long-running criminal investigation against Gordhan, which he dismissed as “political mischief”. Charges were brought against Gordhan late last year but soon withdrawn.

KMPG has apologised to Gordhan. But Moyane has contradicted the auditing firm on its own report, saying it was sound and echoed the findings of other investigations into the intelligence unit.

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