The South African Revenue Service’s (Sars) ageing information technology (IT) infrastructure — which has not been maintained since 2014 — is becoming a critical concern, the Nugent commission heard on Tuesday.
The commission — headed by retired Judge Robert Nugent — is looking into tax administration and governance issues at Sars from the period between 2014 and 2018. This week it is focused on the impact of the suspension of the revenue service’s IT system modernisation programme.
The programme came to a halt in December 2014 shortly after suspended commissioner Tom Moyane’s arrival at Sars after which global advisory firm Gartner was brought in to review the revenue service’s IT strategy on a phased R200-million contract that employees say was not needed.
Andre Scheepers, a former Sars executive for modernisation, told the commission Sars had not had a large-scale hardware refresh since 2014.
Scheepers began working at Sars in 2000 and left in early 2016 because he was not happy with the way he was treated after Moyane introduced a new restructuring model that removed him from his post.
Before he left, Scheepers was responsible for maintaining and refreshing Sars’s IT hardware to ensure the availability and stability of the Sars IT systems.
“If there were no subsequent refreshments after that then you are sitting with a very serious problem, you’re headed for a cliff,” said Scheepers.
“In 2015 I did a forecast of capital expenditure for the next four years… Sars would have had to spend in the region of R250-million per annum in order to maintain the hardware in the four years ending March 2019 which is a few months from now. That would have amounted to a billion rand,” Scheepers said.
“If you didn’t spend that billion rand you have trouble and it’s not something you can remediate in a single financial year. You also need the capacity to roll it out”.
Scheepers said he had started out with a “very strong and capable team”. However, after the restructuring the unit had people who were not “familiar” with the technological work they were supposed to do and were “not equipped to deal with the complex matters”.
Evidence leader Advocate Frances Hobden said the commission had corroborating affidavits from Sars employees who could confirm that the large infrastructure refresh has not continued since 2014 and that “ageing infrastructure is a serious concern”.
Scheepers, like other witnesses who testified on Monday, said he was not informed of the reasons why the modernisation programme was stopped nor was he told why Gartner had been appointed to review Sars’s IT strategy.
The modernisation programme started in 2007 and would have reached completion by 2015. It was a progressive journey to automate Sars’s systems to make tax collections more efficient.
Scheepers said Gartner’s work did not add value to Sars and in fact, the IT overhaul had moved Sars “backwards”.
“I’m going to talk as a taxpayer. My tax return this year took two months to go through the process. Before it would take two days. My tax case is a simple one, I am a salaried employee [and] I have a retirement annuity. I do not have a complex tax affair,” he told the commission.
Two of Gartner’s representatives are expected to testify before the commission next week.
In the third round of the hearings, Solly Tshitangano — a director in the national treasury’s procurement department — took the commission through documents which showed that Gartner may have secured their Sars contract through irregular tender processes.
This is the fourth round of the public hearings and the commission has interviewed over 60 people.
Judge Nugent remarked that after such extensive interviews it is perhaps time to start rebuilding Sars.
“It’s extraordinary what they have done. I don’t know if we are hearing a different story anymore,” said Nugent.