Unsurprisingly, Helen Zille’s tax revolt threat didn’t go down well at the SA Revenue Service (Sars). The former DA leader has long expressed frustration at the SA electorate, often repeating the refrain that voters have got the government they deserve. This frustration took a more dramatic turn when she threatened to organise a tax revolt if there were no consequences for those implicated in the many corruption scandals dogging the governing ANC.
The DA, under Mmusi Maimane, has distanced itself from her threat. However, it comes at a time when tax compliance is already suffering. Sars is in the midst of a major clean-up after it was incapacitated under former commissioner Tom Moyane. A permanent commissioner needs to be appointed urgently to head up the tax agency after the four “lost years” under Moyane, and the process is in fact already underway despite the former tax boss continuing his legal bid to return to the post.
Zille’s threat, and the support she has received from some quarters, makes this doubly urgent for President Cyril Ramaphosa. It is among many factors that are making the restoration of the integrity of the tax agency a key priority. Returning Sars to optimal functionality is also key to the huge task Ramaphosa has set himself to clean up the corruption and state capture that has become endemic over the past decade.
Retired judge Robert Nugent delivered his final report on Sars to Ramaphosa in December just before the country shut down for the holidays. The Treasury has already advertised the post, but Ramaphosa hasn’t yet indicated whether he will take on board Nugent’s recommendations, as outlined in his final report. The deadline for applications for the post was January 18.
Speculation over who will replace Moyane remains just that until Ramaphosa and the Treasury determine to what extent Nugent’s recommendations are practicable. The report recommended legislative and governance changes to ensure the tax agency is never again captured by a leader as wholly compromised as Moyane was. The commission had heard in startling detail how Moyane was handpicked by former president Jacob Zuma to take over the running of the tax agency.
This was perhaps because of, not despite, Moyane’s dubious role at correctional services. The Mail & Guardian reported last week how the former prisons boss blocked a recommendation from the Treasury to have controversial services company Bosasa prevented from doing business with the state after damning findings against it by the Special Investigating Unit.
Due to Moyane’s ruinous reign at Sars the capacity of the tax agency was severely weakened and it bled critical skills, which are now desperately required to take on extensive investigations arising from the allegations made at the various commissions that are still underway.
While acting Sars commissioner Mark Kingon has moved to establish an illicit economy unit to conduct lifestyle audits, for instance, getting back critical investigative skills will be far from a quick or easy process. The Nugent commission revealed that other key units were decimated during the Moyane years, including Sars’ compliance unit, which would be critical for the tax agency to intervene in the unlikely event of a full blown tax revolt.
Nugent importantly recommends that the commissioner be “apolitical” – this also refers to ensuring that the tax agency does not again come under attack from factions in the ANC, as happened under Zuma. Sars became a central prong of Zuma’s state capture project, with its former leadership purged using spurious allegations and “intelligence reports”.
There has been speculation about the names of potential contenders for the post, such as former auditor-general Terence Nombembe, former Sars senior executive Nathaniel Mabetwa, former Sars COO and former Alexander Forbes CEO Edward Kieswetter, as well as Kingon.
An open interview process is also a possibility given the enormity of the task and the need to restore public confidence in the tax agency.
There has also been speculation that Absa CEO Maria Ramos, who this week announced that she is stepping down, could be headed for the post, but this is unlikely. Speculation aside, it remains unclear what process would be followed to make the appointment. What is clear is that should Ramaphosa adhere to the stringent guidelines set by Nugent, the race would be wide open.
Nugent proposed professionalising the appointment process to insulate the tax agency from political influence and find a commissioner with an unblemished track record who is able to manage an organisation of about 14,000 people. It would also require someone with the ability to rebuild the institution after its four-year destruction. Applications received by January 18 are set to be sorted and a shortlist compiled by the Treasury before being sent to the president, who is expected to make the appointment in consultation with the finance minister.
An open interview process is also a possibility given the enormity of the task and the need to restore public confidence in the tax agency. Should Ramaphosa adhere to Nugent’s recommendations — he did in the past when firing Moyane — legislative changes are also on the cards to prop up governance at the tax agency. Nugent also recommended that two new posts be created to tighten oversight: an inspector-general and a deputy commissioner, to be appointed by the president.
With Shamila Batohi taking up one of the key appointments at the National Prosecuting Authority in February, Ramaphosa has to move fast to appoint a new Sars boss. This is critical if the agency is to play a productive role in restoring tax morality and compliance in the country, especially if tax is now also to be used to fight internal factional politics in the DA.
• Marrian is political editor.
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