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Moving forward after years of plunder and corruption

Tax Indaba to look into ways of recouping lost monies.
Sars Commissioner Edward Kieswetter’s experience and approach bodes well, but the level of neglect and damage that has been done will take time to fix. Picture: Moneyweb

The role of all the players involved in the plundering of taxpayer money during a decade of state capture and corruption in South Africa will be examined during the annual Tax Indaba this week.

The focus will also be on whether it is possible to recoup some of the money and what role the South African Revenue Service (Sars) is playing in this process.

The 9th Tax Indaba provides the platform for the engagement between tax professionals and government institutions such as National Treasury, Sars and the Office of the Tax Ombud.

Beatrie Gouws, head of stakeholder management and strategic development at the South African Institute of Tax Professionals (Sait), says the taxpaying community is getting to grips with what has happened.

“It is now about rebuilding trust in government institutions where the money was squandered,” she says.

“It is also about trusting institutions like Sars to restore the revenue flow and to ensure that money that was lost to the fiscus is recovered.”

Enough venting, time for action

While most of the money was made by the participants, certain intermediaries had a hand in legitimising the process. According to Gouws there has been a lot of venting and a lot of finger-pointing, but it is now time to get on with business.

The extent to which governance and the tax collection ability at Sars has been eroded during the reign of former commissioner Tom Moyane has been laid bare before the Nugent Commission of Inquiry into the state of affairs at the tax collector.

In the final report the commission said that by March last year “measures to counter criminality were rendered ineffective” and those who traded illicitly in commodities like cigarettes operated with little constraint.

Fall from world-class status

Sars has lost its former high status among international bodies. “When an organisation that was world class ends up four years later like that, it cannot but mean that the integrity and governance of the organisation has failed,” the commission found.

The institution has been clawing back some of its expertise and has acted upon recommendations by the Nugent commission. In the past few weeks at least five of Moyane’s appointees in top executive positions have been placed on precautionary suspension.

“The Indaba will be looking at the role of everybody in the process, because everybody played a role,” says Gouws.

“We need to look at all the emotions attached to what happened so that we can find a way forward and never return to a place where the country is finding itself right now.”

The second PwC Taxing Times survey, just released, on corporate taxpayers’ experiences with Sars shows that there is still a long way to go before trust will be restored. More than 160 companies from small to large international businesses participated in the survey.

More than two thirds (70.2%) believe Sars is overly aggressive in raising understatement penalties most of the time or always. “There is no clear indication why this proportion has increased since 2018 (62.7%), but the pressure to achieve revenue targets may have had some influence”, the survey found.

Although around 78% of the respondents perceive corporate tax rates as fair, more than 86% believe their money is not spent effectively and 77% believe public infrastructure and services are dissatisfactory.

Improvements noted

Elle-Sarah Rossato, head of tax controversy and dispute resolution at PwC, says the survey does indicate operational improvements on several levels, including the verification process related to value-added tax (Vat) assessments, quicker turnaround times in the payment of Vat refunds, and the issuing of progress reports during protracted audit processes.

She says the appointment of Edward Kieswetter as Sars commissioner brings some institutional memory back to the institution, and he also brings private sector experience.

“Luckily for Sars it is someone who knows the business and someone who seemingly has zero tolerance for inefficiencies and wants the organisation to take responsibility for its mistakes and to correct them.”


However, so much neglect and damage has been done that Kieswetter and his (new) team will need extra time to fix it. Operational and cultural changes have to be made to reduce the painful and frustrating experiences taxpayers have to endure.

“It will take several years to fix not only operational and strategic issues but also the culture of the organisation.”

Rossato says there is a dire need to revive the large business centre to the level of expertise that it had in order to give priority clients a priority service.

Communication with taxpayers has to improve, and there is a need for better collaboration within Sars itself. The need for Sars to keep to the timelines in its own service charter is essential if taxpayers are to regain trust in Sars, says Rossato.

Almost 62% of the respondents do not think that the Sars Service Charter makes a difference to the quality of service taxpayers get.

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You can’t separate trust in SARS from trust in government. So until government has respect for your hard earned cash, well, taxpayers will have no respect for SARS.

No way can Kieswetter fix this on his own

@ Navigator, this was the very first thought in my mind when I started reading the article and I see several commentators below say the same thing. Putting criminals on cautionary suspension and improving communication will not solve anything. We (taxpayers) want to see proper justice, criminal prosecutions, asset seizures and similar. In stead it looks to us that our situation is getting worse, with our assets ( instead of the thieves’) under threat with expropriation without compensation, our standards of living under threat with grand NHI plans, and our basic way of life under threat with police/municipal/education/utilities/etc. services falling apart around us! Our government is still relentlessly pursuing the opposite of what makes sense – indeed nothing that SARS can fix.

Tax Indaba to look into ways of recouping lost monies.

Start with looking at government employees.
Lifestyle audits all round. And why isn’t Uncle tom in choekie?

The problem is not SARS, but who gets the money SARS extorts from taxpayers – the thieving cadres.

SARS is part of the problem with its policy of selective enforcement. Thieving is ignored while bona fide mistakes are punished harshly.

SARS should never have a had a “high status”. Almost since “transformation” they have ignored flagrant transgressions by all sorts of ANC cadres and tenderpreneurs. The “Arms Deal” being one such. They were ANC carpetbaggers who were efficient at shaking down the middle class; that is all.

How can you move forward is nobody has been arrested for the plundering…

Funny how “your people’s'” bygones can be written off off as bygones?

Solidarity had to take Denel to court to pay PAYE deducted to SARS. SARS was doing nothing. That is we need to know. SARS is a party to tax dodging in SA.

End of comments.





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