Nene told Moyane: Focus on your job
Finance Minister Nhlanhla Nene said his working relationship with suspended South African Revenue Service (Sars) commissioner Tom Moyane was difficult, to a point where on a number of occasions, he had to “call him to order” for not focusing on collecting revenue.
On Friday, Nene and former finance minister Malusi Gigaba appeared before the Nugent commission of inquiry into governance issues at the revenue service.
Nene told the commission — chaired by retired Judge Robert Nugent — that his relationship was strained by a number of changes such as the operational changes at Sars and the underperforming economy which was fast putting revenue collection at risk.
“There’s no perfect relationship but there could be a professional relationship in an environment where we share the same objective,” Nene said.
“In the period I worked with the commissioner we had a number of issues to deal with, in some instances, I felt I had to appoint an advisory committee because I felt he was focusing on the so-called “rogue unit” rather than focusing on revenue which is the core function.
“We handled that matter quite maturely, but I continued to have my reservations because from time to time I had to call him to order so he could focus on revenue,” Nene added.
Nene was responsible for approving the restructuring proposal designed by consultancy firm Bain & Company and brought forward by Moyane. This process has been largely credited for the overhaul of Sars’s operational model which dismantled key units in Sars such as the Large Business Centre and creating inefficiencies that led to revenue shortfalls, the latest being a R48-billion hole from the 2017/2018 tax year.
Nene said he endorsed the review of Sars’s operational model because he believed that the intention was to revitalise and strengthen Sars’s systems to improve revenue collection.
He said Sars was going through a tough time following the “unceremonious” resignation of acting commissioner Ivan Pillay including being embroiled in months of negative media reports on the rogue unit which was said to be running a brothel and spying on former president Jacob Zuma.
He added that it was an operational matter and Moyane could have gone ahead without his approval.
“With hindsight it did not actually achieve the intended objective,” said Nene.
“I would have hoped with a professional company [Bain & Co.] that is advising and in fact had advised one of our institutions, the Development Bank of Southern Africa, and was able to turn it around, I found it very strange that in this instance the same company produced a different outcome… I am utterly disappointed,” said Nene.
Over the course of the commission’s public hearings former and current Sars officials have repeatedly spoken about how the implementation of the new model not only undercut Sars’s efficiency but was used by Moyane to secure power at Sars creating an environment of fear.
This was part of the reason why the commission of inquiry was established Gigaba said on Friday.
Gigaba said during his time at treasury he proposed the formation of the commission to Zuma to get an “in-depth” perspective into issues of governance and administration at Sars. But it was Ramaphosa who “promptly” established the commission.
Gigaba was also quizzed about giving the go-ahead for a mysterious three-day trip that Moyane took to Russia to meet with the Russian tax authority in November 2017.
Gigaba approved the trip even though Moyane had not provided enough information or a report on what the trip was about in line with due process said acting commissioner Mark Kingon in a submission to the commission.
To this day, Gigaba does not know what the trip was about as Moyane did not provide a report upon his return.
Gigaba told the commission that it was not unusual to give approval for an urgent trip without having extensive information as the commissioner travels frequently. “I relied on the integrity of the person and never thought they would provide me with incorrect information,” he said.
When asked if he had requested a report, Gigaba said in-between preparing for the African National Congress’s December conference, the February budget speech and finally being reshuffled back to Home Affairs, it “slipped through.”