READ: Damning Nugent report into 'reckless mismanagement' at SARS

MR President

Herewith the first Interim Report of the Commission of Inquiry.

Judge R Nugent,
Commissioner

Executive summary

The Commission has made considerable progress towards addressing its terms of reference and is confident that it will be capable of reporting substantively in the assigned time. However, the Commission has been perturbed by evidence it has heard of the current position at SARS, which is set to perpetuate ongoing loss of revenue if there is no immediate intervention.

What is clear to the Commission is that SARS reeks of intrigue, fear, distrust and suspicion. We have heard of it repeatedly in evidence, and we have encountered it ourselves. The trajectory of modernisation, that had been in the making for a decade, was summarily stopped when the current Commissioner, Mr Tom Moyane, took office on 27 September 2014, and the systems are degenerating as technology advances. The operating model has been restructured such that fragmentation of functions inhibits co-ordinated action to the benefit of delinquent taxpayers.

The Large Business Centre as it had existed has been eviscerated to the detriment of revenue collection. The restructuring of the organisation displaced some 200 managerial employees from their jobs, many of whom ended up in positions that had no content or even job description, and in exasperation many skilled professionals have left. Others remain in supernumerary posts with their skills going to waste. Measures to counter criminality have been compromised and those who trade illicitly in commodities like tobacco operate with little constraint.

Relations between the Commissioner of SARS and other state institutions – the Treasury, the Auditor-General, the Davis Tax Committee, the Financial Intelligence Centre – are icy, if there is any relationship at all, and SARS is isolated from its former high status amongst international bodies. Meanwhile, the reputation of SARS continues to be tarnished by reports in the media, many of which are true, to which the only response by Mr Moyane has been to attempt to intimidate the media by spurious litigation.

Moyane's 'recklessness'

In the unanimous view of the Commissioner and those appointed to assist him, that has been brought about by at least reckless mismanagement of SARS under the tenure of Mr Moyane and it ought not to be permitted to continue. We consider it imperative that a new Commissioner be appointed without delay to remove the uncertainty at SARS and enable it to be set on a firm course of recovery so as to arrest ongoing loss of revenue.

We stress that the replacement of Mr Moyane is not a panacea, but only the first necessary measure without which there is no possibility of rectifying the damage that has been done to SARS, and any further recommendations will be fruitless, hence our recommendation at this stage, without awaiting the Commission’s final report.

There are other interventions that the Commission anticipates will be required if SARS is to be restored but those are more appropriately dealt with in its final report. We are aware that disciplinary proceedings are pending against Mr Moyane but we consider that to be irrelevant to our recommendation. Our concern is not disciplinary transgressions but instead the management of SARS.
In the circumstances the Commission recommends:

(a) That the President take steps without delay to remove the current Commissioner of SARS from office.

(a) That the President thereupon takes steps without delay to appoint a new Commissioner of SARS.

To inspire confidence in a new Commissioner of SARS the Commission further recommends that he or she be appointed through an open and transparent process that is subject to critical appraisal, but without compromising the urgency of the appointment.

Interim Report on Inquiry I... by on Scribd