Parliament, Tuesday, 20 March 2018 – The Standing Committee on Finance has welcomed the President’s decision to suspend the South African Revenue Services (Sars) Commissioner, Mr Tom Moyane, and urges that the disciplinary inquiry into his conduct be fair, swift and decisive.
In its Joint Fiscal Framework report adopted by Parliament on 7 March, the standing committee and the Select Committee on Finance recommended:
- We urge the President to establish the commission on Sars as soon as possible. Part of its mandate should include an investigation into how Sars has managed the allegations against Mr Jonas Makwakwa and Ms Kerry-Ann Elskie. It should also investigate the legitimacy of Sars’ disbandment of the High Risk Investigation Unit (the so-called “rogue” intelligence unit), including through considering the significance of KPMG’s withdrawal of its recommendations on this unit. While we fully support representivity in Sars senior management and more generally within the organisation, and have been constantly focusing on the need for this, we think the commission should also look into the exodus of senior staff in recent years.
Thus, the committee wrote to the President and Finance Minister Nhlanhla Nene last week, asking them to consider its request.
“We need to learn lessons from the performance of Sars over the past few years and consider whether it is necessary to amend legislation, regulations or policies to improve the independence and functioning of Sars,” said Mr Yunus Carrim, the Chairperson of the committee.
Although the committee understands that revenue targets have not been achieved in recent years because of the slowdown in economic growth, it believes that if Sars had been more united, efficient, effective and credible, it would have raised more revenue than it did, despite the adverse conditions. The committee has repeatedly raised this in our quarterly meetings with Sars to no avail.
The committee feels strongly that in view of the role Sars plays, it is very important that senior officials are not just beyond reproach, but are seen to be beyond approach. This is especially important in view of the need to achieve revenue targets, and tackle declining compliance and tax morality.
The committee repeats its call that consideration needs to be given to the Sars commissioner answering to a Sars board, as proposed by the Davis Tax Committee. It also reiterates the view that government should consider strengthening the independence and powers of the Tax Ombudsman.
“Again, we believe that there is a need for tax legislation to be amended to ensure greater accountability of Sars to parliament while maintaining the confidentiality of taxpayers. We have mandated Parliament’s Legal Services Unit to prepare proposals in this regard, including through doing research on how parliaments in other open democracies hold their revenue collection bodies to account,” Mr Carrim explained.
The committee wishes the new Acting Commissioner, Mr Mark Kingon, well. Mr Kingon contacted the Chairperson early this morning to pledge that he would fully cooperate with the committee within the framework of the law and rules of parliament. Among the issues that the committee believes Mr Kingon should focus on and work closely on with other agencies is tackling decisively the staggering amounts of money flowing out of the country illicitly.
The committee encourages Mr Kingon to work with his colleagues in Sars to also ensure that officials are above reproach; all taxpayers, whoever they are, pay the taxes due to the people of South Africa; and value added tax (VAT) returns are processed in terms of clear, open and transparent policies.
While the President appoints the Sars Commissioner, after consultation with the Minister of Finance, the Sars Commissioner should answer to the Minister directly within a clear framework, which includes ensuring that the Minister does not unduly politically interfere in Sars’ internal matters.
The committee has decided to postpone the meeting which was scheduled for this afternoon with Sars, following the suspension of Mr Moyane. The meeting will take place shortly after Parliament reconvenes from the Easter constituency break.
The committee will continue to pursue the same issues with Mr Kingon that would have been addressed with Mr Moyane.
ISSUED BY PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE STANDING COMMITTEE ON FINANCE, MR YUNUS CARRIM
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