The South African Revenue Service (Sars) is “going full speed” towards ensuring lifestyle audits are hardwired into the tax authority’s normal operations. (Oupa Nkosi)
The South African Revenue Service (Sars) and the national treasury are working with the criminal justice system to pursue a civil complaint and criminal charges against Bain & Company, the Boston-based consultancy which contributed to the destruction of Sars during the tenure of axed commissioner, Tom Moyane.
If Sars commissioner Edward Kieswetter has his way, Bain will turn state’s witness as the tax agency moves to restore the damage inflicted during the Moyane years, he said in an interview with the Mail and Guardian on Tuesday.
Bain developed a flawed operating model at Sars for Moyane, which destroyed much of the tax agency’s capacity, sidelined key senior executives and culminated in a R100-billion decline in tax revenue.
The company has admitted to its role in the destruction of Sars and paid back R217-million, including interest for its work, but according to Kieswetter, this is not nearly enough to repay the agency and the country for the severe damage its work has wrought on Sars and its staff.
Speaking to the M&G on Tuesday, Kieswetter spoke about the extent to which employees lives and careers were destroyed at the tax agency, due to Bain and Moyane’s overhaul of the SARS operating model.
This was a recurring theme in testimony given before the Nugent commission of inquiry into tax and governance at Sars — chaired by retired Supreme Court judge Robert Nugent — which submitted its final report to President Cyril Ramaphosa in December. Following this, Kieswetter was appointed as Sars commissioner.
Kieswetter has spent the last two months — he took up the office in May — meeting Sars employees and attempting to turn around the dire situation at the tax agency, which is critical to collecting taxes to fund the government’s social interventions such as social grants, housing, health and education.
Kieswetter spoke candidly about Bain’s role in the destruction of Sars and how he is working to reverse the US-based company’s operating model which neutralised capacity in various key divisions at the tax agency.
“Paying back your fees doesn’t even begin to touch the surface of the billions of rands that wasn’t collected because of the impact of that fake piece of work and the destruction of lives and families because of it, so I expect Bain to come clean.
“I have said to the representatives of Bain, you need to bring your people from America, they must come here. I want to look them in the eyes and I want to tell them that they need to come with full disclosure and to the extent that they we will pursue criminal action against them. I expect them to turn state witness,” he said.
Kieswetter said the tax agency and the treasury was working with investigative agencies and the National Prosecuting Authority to ensure that Bain was held to account.
“I do think that they have a case to answer so in addition to paying the money back, I believe that they have a civil case to claim for damages and they have a criminal case to answer for, for what I believe is their complicit participation in the capture of Sars,” he told the M&G.
According to the Business Day, Bain has appointed Norman Mbazima, the former chief executive of Kumba Iron Ore, to chair an oversight board which the company set up to deal with the fallout of the scandal.
However, the company has been criticised for making only superficial reparations and has not yet come clean over the insidious role it played at Sars, following revelations that its own head of operations in South Africa, Vitorrio Massone, had admitted that it provided “executive coaching” for Moyane a year before he was even appointed the commissioner of the tax agency.
Massone terminated his participation in the Nugent commission before shedding light on a number of meetings he held with former president Jacob Zuma over potential work the firm could conduct for the state, including on the ANC’s 2014 election manifesto and the chief procurement office in the national treasury.