Tax compliance under Moyane took a knock, SARS inquiry hears

PRETORIA - The tryes of the South African Revenue Service (SARS) are wearing off.

This was part of the testimony at the Nugent Commission of Inquiry, which was set up after President Cyril Ramaphosa suspended SARS boss Tom Moyane. 

The commission heard that tax compliance at the revenue collector took a knock after the implementation of Moyane’s new operating model. 

Moyane’s new operating model led to the shrinking of capacity in vital divisions at SARS and put staff under pressure.

The operating model was Moyane’s main project after taking over the reins at the tax collector.

However, the Nugent Commission has heard that he was fixing a system that was working already.

“We saw this new model as a simple reshuffling of chairs‚ with some chairs taken away and some chairs added,” said SARS executive Fareed Khan. 

“There was no vision that we were made aware of”.

The commission was also told that former SARS chief operations officer Jonas Makwakwa acknowledged that the new operating model didn’t work. 

This despite him being head of the steering committee that worked with international consultancy firm Bain to introduce the structure.

Witnesses also questioned why one of the main revenue-collecting units at SARS, the Large Business Centre, was shut down as part of the new operating model.

The unit generated 30-percent of the revenue collector’s income and dealt with large multinational companies.

“A division that’s generating such revenue why would you do away with it. Particularly if one of your design principles spoke about increasing revenue, I don’t know,” said SARS executive Vincent Sibande.

The Nugent Commission has called on Bain & Company to testify next week on its role in formulating SARS’s controversial operating model. 

The commission has raised concerns about what exactly the model was meant to achieve.