Former judge Robert Nugent will chair a commission of inquiry into tax administration and governance at the South African Revenue Service (Sars), President Cyril Ramaphosa announced on Wednesday.

"I have today signed a proclamation establishing a commission of inquiry into tax administration and governance chaired by former judge Robert Nugent, assisted by Mr Michael Katz, Adv Mabongi Masilo and Mr Vuyo Kahla," Ramaphosa said while delivering the presidency budget vote in the National Assembly.

"The terms of reference for the commission will be gazetted in the coming days."

The commission came after the revenue service missed its target this year, reporting a  revenue shortfall of R800-million for 2017/18. 

"We have also taken steps to address the leadership challenges at Sars, including the suspension of the commissioner, the initiation of a disciplinary process and the appointment of an acting commissioner," Ramaphosa said referring to the March suspension of Tom Moyane as Sars commissioner.