SARS did not need to be restructured ― Gordhan

Minister of Public Enterprises and former South African Revenue Services (Sars) commissioner Pravin Gordhan defended his record at the institution that was formerly under his watch on Tuesday.

Gordhan was the first witness to appear before the commission of inquiry into tax administration and governance at the revenue service, headed by retired Supreme Court Judge Robert Nugent in Pretoria.

The inquiry comes in the wake of growing concern over the politicisation of the agency in recent years and concerns about how this has impacted its ability to meet revenue targets.

It is running at the same time as suspended Sars commissioner Tom Moyane faces disciplinary charges over a number of controversies at the agency. These include allegations that his former second in command, Jonas Makwaka, was implicated in possible money laundering activities.

READ MORE: Gordhan lays out state’s case against suspended SARS boss

One of the tasks of the inquiry is to look into the reasons for the exodus of skilled people at the revenue services between April 2014 and March 2018 – the period that the commission is focusing on.

At its peak Sars had more than 14 000 staff members, but this has now declined to about 12 600. Acting Sars commissioner Mike Kingon told Parliament last month that the reduction in staff had affected the revenue services ability to curb illicit financial flows.

Speaking on the organisational culture at the revenue services, Gordhan said that until 2014, the revenue service was a reputable institution which not only managed to inculcate a culture of tax compliance amongst South Africans but was also a place where people were proud to work.

“The [revenue service] was a world-class modern, proficient and respected tax and custom administration. South Africans who worked for Sars held their heads up high both within South Africa and globally as well,” said Gordhan. “The institutional management was respected. We could attract the best accountants, the best tax lawyers and people were proud to say that they worked for Sars and would proudly want Sars to be part of their CV’s so they could move on to higher offices within the public and private sector”.

Before the commission started, Judge Nugent told the press that from the few interviews that they had conducted they were able to uncover some “disconcerting” things about the morale of employees at Sars.

During the hearings, Judge Nugent asked whether Moyane decided to restructure the revenue services which cost between R300-million and R400-million.

“What I want to know is why if you think that model was operating impressively, what prompted the need to review it at a massive cost… was it not working as well as you say?” asked Nugent.

Gordhan quickly dismissed this: “Reasons that circulate was that Sars was in a mess at the time, that’s a narrative that I would like to [refute]”. He said there was evidence that only minor and incremental changes had to be made to improve the institution’s efficiency.

“I think what we learnt in 2016 during the leaks of the so-called Gupta emails we now know to connect the dots” said Gordhan.

He also rejected the accusation that affirmative action and employment equity procurement processes had been ignored under his watch. “Being a political activist, the last thing you can accuse people like me [of] is not having deference for people who have been historically wronged… That wasn’t the ethos that guided us and I have to reject it with the contempt it deserves” said Gordhan.

“There was a multiplicity of techniques that were used to empower black employees to become true professionals – many of them are not here or have been side-lined”

The public hearings will continue until Friday. 

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Tebogo Tshwane
Tebogo Tshwane

Tebogo Tshwane is an Adamela Trust financial journalism trainee at the Mail & Guardian. She was previously a general news intern at Eyewitness News and a current affairs show presenter at the Voice of Wits FM. Tshwane is passionate about socioeconomic issues and understanding how macroeconomic activities affect ordinary people. She holds a journalism honours degree from Wits University. 

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