The date is April 3, 2017.
The venue is Linton House Auditorium at the South African Revenue Service (Sars) office in Brooklyn Bridge, Pretoria.
At the podium is Sars Commissioner Tom Moyane.
“Ladies and gentlemen, it gives me great pleasure to announce that as at midnight [on] the 31st of March 2017, Sars has collected R1.144 trillion, in line with the revised estimate as announced by the former minister of finance in the February 2017 budget speech,” he says.
The audience starts clapping.
“The preliminary results show Sars having exceeded the revised estimate by over R300 000,” Moyane continues.
“Wow,” someone shouts from the audience.
More clapping follows.
“We are also pleased to announce the growth in refunds for the same financial period of 8.6%.”
A bit later, Moyane says he would also like to address the elephant in the room – refunds. The frustrations of taxpayers about outstanding refunds have not gone unnoticed.
“Sars has not changed its approach to refunds. It continues to implement its systems and processes that are tried and tested, which have been in place for several years.”
Later, he adds: “It is with this in mind that Sars has put in place systems and processes to ensure minimum delays in payments of refunds.”
A great narrative, confidently presented and backed up by figures.
Only it proved to be window-dressing.
On September 4, 2017 the Tax Ombud, Judge Bernard Ngoepe, finds that Sars unduly delayed tax refunds.
In October 2017, the Medium-Term Budget Policy Statement (MTBPS) shows that tax revenue may fall R51 billion short of earlier estimates.
On March 19, 2018, President Cyril Ramaphosa suspends Moyane amid a deterioration in public confidence and as public finances suffer.
By October, the MTBPS highlights a backlog of value-added tax (Vat) refunds. An underestimation of refunds due has led to an excessively optimistic view of revenue growth. The Vat refund estimate is revised upwards by R9 billion and roughly R11 billion has to be paid out to clear the backlog in the credit book.
Which brings us to April 1, 2019.
Again, the venue is the Linton House Auditorium.
Moyane is absent from the podium. He was fired towards the end of 2018. Yet his legacy is almost tangible.
Sars announces that it missed its revised revenue collection target for 2018/19 by R14.6 billion.
There is no clapping.
Ismail Momoniat, head of tax and financial sector policy at National Treasury, says the legacy of the last few years will take time to reverse.
Poor economic growth, lower compliance levels and the Vat refund backlog have added insult to injury.
If Sars had continued with its previous practice of holding back refunds, it could have reached its target.
“In fact, there seems to have been lots of artificial playing around to try and make sure the target was reached,” Momoniat says.
A sober narrative, backed up by rather poor figures.
But it may just be the start of a difficult turnaround at Sars.
To be successful, Sars will have to regain taxpayers’ trust, something that will be difficult given the deception of the last few years.
When new commissioner Edward Kieswetter joins Sars on May 1, he will not only have to deal with a dysfunctional operating model, low staff morale and pressure on tax collection, he will also have to regain taxpayer trust.
Kieswetter knows it will be an uphill battle but seems to have the right mindset.
When asked why he volunteered for such a difficult job in a recent interview, Kieswetter stressed the need to work together to make South Africa’s young democracy work rather than criticising from the sidelines.
He said his biggest priorities will be to give Sars employees hope and to restore their pride in the organisation, and to rebuild public trust.
This will be a tough ask that needs to start with an open and honest conversation.
Targets won’t be exceeded. There won’t be applause.
But the painful process of fixing Sars must start with the cold hard facts.