The Nugent report of the Commission of Inquiry into Tax Administration and Governance barely scratched the surface in documenting the extent of damage state capture has inflicted upon the South African Revenue Service (Sars), with the man tasked with cleaning up and resuscitating the agency saying it was worse than imagined.
“Internally, the staff morale had a massive blow,” new Sars commissioner Edward Kieswetter said. “When I walk around and talk to people, you see their trauma; you see the pain they have experienced. The actual situation on the ground is worse than even the Nugent report says – and I have seen that first hand…”
Speaking candidly to The Citizen on the sidelines of the Tax Indaba, an annual gathering of 1,800 delegates, he referred to the work of rebuilding Sars as an “internal healing process”.
Kieswetter, who took over from acting commissioner Mark Kingon and succeeded Tom Moyane, who was fired in November last year, has his work cut out: he has to rebuild a revenue collector infested with massive governance failure, zero integrity and deliberately hollowed out of core capabilities and competencies.
“For example, the dismantling of the large business centre, an international model against which reputable revenue authorities manage large corporates: there was no basis for breaking it up. One had to question what the real intent was,” Kieswetter said.
That Sars consultants like Bain and Gartner were involved in this analysis to produce either fake or bad advice could “only be to serve another purpose other than that of building a revenue authority”.
Kieswetter said the mass staff exodus that followed, resulted in significant erosion of core competencies: at least half of the employees who left worked in critical technical and highly specialised jobs.
Since 2014, more than 2,200 employees had resigned, 550 employees retired – and many had been fired or suspended. Over 300 of these were compliance auditors, more than a 100 investigative auditors and more than 113 of them were from the large business centre.
Kieswetter said top on his priority list was to stabilise Sars and restore its credibility to attract skilled people again.
“Before you can recruit skills, you have to give the confidence that Sars is, in fact, a credible employer. Why would you want to work for Sars if you do not know whether you can trust the system? It is first creating internal stability, restoring internal confidence and trust, reflecting deeply on what kind of employer we want to be,” he said.
Kieswetter was reaching out to the skilled personnel who left on a “case-by-case basis” to convince them to return – but said he first has to get rid of the rotten apples. The healing of the agency has to start from within.
“Get rid of the cancer and the disease from within” before he could bring in fresh people, Kieswetter said.
“Unfortunately when you have state capture, it attracts the wrong kind of people. We have to be clear about the kind of people we are going to attract … we need to start dealing with people who are not fit for Sars; people with wrong value systems; people who were quite comfortable in this era of unprofessional and unethical behaviour – in many instances corrupt, deliberate acts of corruption,” he said.
The commissioner said he was hopeful Treasury would support his massive recruitment drive.
He, however, added that the agency could not be turned around overnight.
The damage, which has led to the tax revenue shortfall of R57 billion – from R7 billion in the 2014-15 tax year – “will linger on for years to come”.
Nugent report casualties:
- The Nugent report has fingered several Sars executives, including former commissioner Tom Moyane, who has since been shown the door. These are some of the latest casualties:
- Chief officer of governance, international relations, strategy and communication Hlengani Mathebula left this week after allegations of misconduct.
- Digital information and technology services head Mmamathe Makhekhe-Mokhuane, infamous for the “protect-me-from-yourself” television interview, has been suspended.
- Teboho Mokoena, chief officer of human capital and development, on suspension.
- Luther Lebelo, the group executive of employee relations, on suspension.