Kieswetter to step down as Sars commissioner early next year

With about eight months left on his contract, South African Revenue Service (Sars) commissioner Edward Kieswetter has indicated he is set to leave the position early next year. 

In an internal e-mail to Sars staff — seen by Business Times —  Kieswetter said his two-year contract extension was coming to an end and he was speaking with finance minister Enoch Godongwana and President Cyril Ramaphosa on how best to handle the transition. 

“As the two-year extension nears its end, it is extremely important that, as responsible leaders, we begin the process of transition. In this respect, I, the minister of finance and the president have commenced a discussion — transparently and responsibly — to address the leadership transition well ahead of time,” Kieswetter said.

In the e-mail, Kieswetter sought to respond to “speculation” about his departure, which he said was “unhelpful and potentially undermines the hard work and progress made to date”. 

When President Ramaphosa requested that I stay on beyond the end of my five-year contract, as I communicated around February 24 2024, I agreed to this request because of my deep commitment to South Africa and indeed the wellbeing of Sars

—  Edward Kieswetter, Sars commissioner

“When President Ramaphosa requested that I stay on beyond the end of my five-year contract, as I communicated around February 24 2024, I agreed to this request because of my deep commitment to South Africa and indeed the wellbeing of Sars,” he said.

While the overwhelming number of ordinary South Africans embraced the extension of his term, a small minority “would love to see the end of my tenure”, he said.

“We must continue to put all our energy into the goals we have set for the organisation. South Africans look up to Sars to work unwaveringly to help our country prosper and exercise its sovereignty.” 

Kieswetter said he remained committed to acting in the best interests of Sars and ensuring the organisation remained stable, effective and efficient.

Kieswetter’s letter to staff followed questions from Business Times on Thursday inquiring about his imminent departure. 

“The president requested me to extend my term. I am now in the final months of my extended contract,” he responded. 

Last year, Ramaphosa asked the Kieswetter to stay beyond his original term, which was meant to expire at the end of April 2024. They both agreed to a two-year extension. 

Kieswetter took over as commissioner in March 2019, with a mandate to rebuild the tax authority. Its capacity had been severely damaged by Tom Moyane, a Zuma-era commissioner who was fired by Ramaphosa in November 2018 on the recommendation of the Nugent commission of inquiry, which investigated what had gone wrong at Sars.

Godongwana and Kieswetter had a public fallout in February this year, when the Sars boss criticised plans to increase VAT by two percentage points — from 15% to 17% — to boost national revenue by R60bn ahead of the finance minister’s first budget presentation.

Speaking at a seminar organised by investment management company Allan Gray in January, Kieswetter said increasing tax would not lead to bigger tax revenues. He advised that Sars instead be given more resources to go after tax dodgers, who are hoarding an estimated R800bn in outstanding taxes.

At a press conference to present his first failed budget — in Cape Town on February 19 — a displeased Godongwana was caught by a live microphone telling National Treasury director-general Duncan Pieterse and minister in the Presidency Khumbudzo Ntshavheni that Kieswetter was talking “rubbish”.

When asked at another press conference about the conversation, Godongwana downplayed the live mic incident, but said Kieswetter should stick to his lane as the finance minister had sole responsibility for tax policy.

I think it will be best if Kieswetter stays on, given the stellar work he has done in stabilising Sars after the state capture years. Having said that, I think he will leave the organisation in a much better state, and if he decides not to stay on it won’t be a catastrophe

—  Izak Odendaal, chief investment strategist at Old Mutual Wealth

The two subsequently held meetings to iron out their differences, with the Treasury later allocating Sars an extra R5.7bn to ramp up tax collection.

Presidency spokesperson Vincent Magwenya referred questions on Kieswetter’s tenure to the Treasury. “The president appoints [the Sars] commissioner, but the transition is managed by Sars in consultation with National Treasury,” he said.

The Treasury had not responded to questions at the time of going to print. 

Miyelani Mkhabela, director and chief economist at Antswisa Transaction Advisory, described Kieswetter as a visionary leader who understood the tax body and the revenue systems of the country. “His strategy of suggesting technological advancements in Sars’s systems with better tracking solutions is a stunning strategy to improve revenue collection for the future,” he said.

Mkhabela said both Godongwana and Kieswetter understood their responsibilities. “It’s not like Godongwana clashes with them. He is in a senior position. Every department is expecting a piece from him, and he must do a democratic allocation to the national, provincial and local governments. It may look easy, but it’s not, and it’s the nature of the job.”

Izak Odendaal, chief investment strategist at Old Mutual Wealth, said while it would be of benefit if Kieswetter’s tenure was extended, he had played a pivotal role in restoring financial, governance and operational stability to Sars.

“I think it will be best if Kieswetter stays on, given the stellar work he has done in stabilising Sars after the state capture years," Odendaal said. "Having said that, I think he will leave the organisation in a much better state, and if he decides not to stay on it won’t be a catastrophe.”

André Daniels, head of tax controversy and dispute resolution at Tax Consulting South Africa, said Kieswetter’s consistent performance has been vital for funding critical economic development initiatives in South Africa.

“Edward Kieswetter rejoined Sars as commissioner in 2019, at a time when governance, integrity and expertise had been eroded by years of state capture," he said. "He has on several occasions alluded to a clear mandate to turn Sars around and rebuild it into a smart, modern tax administration, regaining the trust of South African citizens.”