/ 19 October 2018

Moyane’s failings laid bare

Judge Robert Nugent recommends
Judge Robert Nugent recommends, on the basis of the havoc he wrought in the Revenue Service, that commissioner Tom Moyane be fired immediately. (Paul Botes/M&G)

Pressure is mounting for President Cyril Ramaphosa to fire suspended South African Revenue Service (Sars) commissioner Tom Moyane. Evidence put before the Nugent commission this week showed that his legacy has left the infrastructure of Sars in disarray and has led to its degeneration.

This week the commission of inquiry looking into tax administration and governance at Sars heard testimony from witnesses who hold executive positions in its IT division. They said Moyane’s decision to halt a much-needed modernisation programme in 2014 had taken the revenue service’s IT systems backwards.

The recommendations to stop the modernisation programme had come from Bain & Company in presentations made to Moyane when he still had “ambitions” of becoming commissioner.

Retired Judge Robert Nugent, the head of the commission, in his interim report, recommends that Ramaphosa should remove Moyane from office immediately as a “first, necessary” step towards correcting the effects of his “reckless management” of the institution.

Moyane’s reign appears to have left very little untouched, including the fragmenting of the revenue service’s operational structure, diminishing the effectiveness of its tax-collecting ability, breaking down its enforcement and fraud prevention capacity, and leaving the IT infrastructure on the verge of collapse.

The Sars modernisation programme, that was started in 2007, was meant to automate its systems, replacing the largely paper-based operations to process tax and data collection efficiently.

With this programme, Sars was able to introduce eFiling, which is now, because of inadequate updates, at risk of collapsing by the year 2020, when it will no longer be compatible with computer web browsers.

“No responsible leader of a major and complex organisation would have acted as Moyane did, with lasting impact on the current state of Sars,” Nugent said in his report to Ramaphosa, in which he made a case for Moyane’s dismissal.

Current and former IT executives told the commission they were not consulted when Moyane put a moratorium on the modernisation programme. They also said they were given no sight of the mandate given to global consultancy firm Gartner, after it was brought in to review and design a new IT strategy and structure at Sars.

“I really didn’t have any understanding. What was going through my mind at the time was why are we trying to fix what’s not broken,” said Intikhab Shaik, the group executive for business solutions in the revenue service’s digital and IT services division.

When asked what effect Gartner’s overhaul had on the IT structure, Sello Mtshali, executive for IT strategy, said it was “a disaster”.

“But why use the word disaster? It is because it had disastrous effects on the service that we provide,” he said.

He said the revenue-collection IT systems worked on a 24-hour cycle and had to be maintained regularly to ensure a 99.7% availability rate, so that taxpayers could use the system with ease and comply.

“We worked very hard day in and day out … to actually make sure that Sars gets to that level of standard …”

“We have thrown away all the technological investment we have done, all the personal investment with our very energy, our time and everything else, to have regressed back to that point,” Mtshali said, adding that Sars was running out of time and was at risk of reaching a point of no return.

Andre Rabie, an executive for IT strategy, said Sars was probably operating at 20% to 25% of what it was before the moratorium on the IT development programme.

“We are on a trajectory to basically get to a position where failures will become the norm, which is obviously linked to outages and which will have a huge impact on the South African tax and customs world,” he said.

Ramaphosa has given Moyane until Wednesday next week to respond to the interim report and its recommendations.

The cost of undoing the damage caused by his moratorium on modernisation alone is estimated to be R2.16-billion over the next five years, which is needed for IT hardware upgrades, procurement and hiring skilled staff.

Andre Scheepers, a former executive on the modernisation programme, told the commission that, after Moyane introduced an extensive restructuring of the revenue service’s operating model, people were not familiar with the technological work they were supposed to do and were not equipped to deal with the complex matters were employed in his division.

Responding to a question about what Sars should do to fix its digital and IT services, division head Mmamathe Makhekhe-Mokhuane, who started working at Sars in May 2017, said: “We need to look at our governance structures, how long do I stand in what meetings, how can we make sure that decision making is quicker.”

She added, in a confused, rambling testimony, that Sars employees needed to “embrace each other”.

“You have an organisation where there are smoking places but my girls express milk in the toilet. If you are a smoker you think I’m crazy when I say you can’t have a smoking place but why should I make a smoking place when a mother must express milk in the toilet.”

Tebogo Tshwane is an Adamela Trust business reporter at the Mail & Guardian