Patrick Cairns
3 minute read
2 Dec 2016
8:03 am

New low in Gordhan-Moyane relationship?

Patrick Cairns

Is there a total breakdown in trust between the minister of finance and head of Sars?

The relationship between Finance Minister Pravin Gordhan and South African Revenue Services (Sars) commissioner Tom Moyane has always been strained. This has been public knowledge ever since Moyane refused Gordhan’s instruction to halt a restructuring process at the tax authority in January this year,

However, the enmity between the two appears to have sunk to a new low. In response to a question in parliament on Wednesday Gordhan reportedly said that he could not verify the accuracy of certain information that he had received from Sars “because of a lack of accountability and co-operation from Sars top management”.

This would suggest that there is a complete lack of trust between Gordhan and the man running one of the most important institutions under his authority. Sars reports directly to the minister of finance, but Gordhan is clearly unsatisfied with the way in which this is happening.

On Thursday, Sars responded to reports about the minister comments through a media statement that insisted that its leadership is accountable.

“With dismay, the South African Revenue Service (Sars) has noted today’s media reports where the Sars’ leadership is unjustifiably accused of lack of accountability,” the statement read. “The Sars wishes to express its deepest concern and disturbance at this turn of events that cast aspersions and blemishes on the character and integrity of its leadership.” 

It went on to insist that Sars management had received 29 parliamentary questions through the office of the finance minister since Gordhan was appointed in December 2015, and had responded to all of them on time. Its leadership had also appeared before parliamentary committees five times during this period. 

In addition, it stated that: “Sars leadership has met the current finance minister eight times since he took office to discuss issues of mutual interest. In this regard, the Sars’ record of meetings attest that the current Finance Minister has never at any point expressed lack of confidence and/or lack of accountability in the leadership of the Sars.”

Sars may have believed that this point was strengthening its argument, but it actually only raises further questions. If Gordhan has met with the top management at Sars only eight times since December last year, that means that have not come together even once a month. 

When Trevor Manuel was minister of finance and Gordhan was the head of Sars, they met at least every two weeks. So why have these meetings been so infrequent? 

While Sars may proclaim that it is “committed to a professional working relationship with the current finance minister”, such a relationship simply doesn’t seem to exist. For the minister to do his job he has to be confident that the tax system is working efficiently and that it inspires trust in the public. It would appear that is no longer the case. 

This breakdown of trust even caused certain media to suggest that Gordhan had reacted by appointing Judge Dennis Davis to head a major inquiry into the revenue service. There were reports that he would be looking at governance and accountability within the organisation. 

However, speaking on 702 and Cape Talk on Thursday evening, Davis insisted that the finance minister had made no such request of him. Whatever work he was doing with regards to Sars was part of what he was already doing in his ambit as head of the Davis Tax Committee.

“He asked us a long time ago,” Davis said. “And what he asked us to do is look at the question of whether there should be a congruence between tax policy and tax administration. Did the recommendations of the Katz Commission, which some of us were part of and which gave rise to an independent Sars, hold up in the year 2016? And if so, was Sars’ model at present congruent with those recommendations?”

He added that it is not his job to get drawn into personal issues or disciplinary questions.

“When I get quoted saying things about the relationship between the minister and the commissioner, I don’t know where that comes from,” Davis said. “That’s not my job to say.”

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