South Africa 23.8.2018 06:00 pm

Moyane introduced consulting firm ‘that wrecked Sars’

The Nugent commission of inquiry which is probing tax administration and governance issues at Sars. Picture: ANA

The Nugent commission of inquiry which is probing tax administration and governance issues at Sars. Picture: ANA

Witnesses at the Nugent commission fingered an inefficient new operating model designed by Bain and Co as the reason why the revenue service crumbled.

Testimony from key witnesses today focused the spotlight on consulting firm Bain and Co’s role in the decimation of South Africa Revenue Services (Sars) under now suspended commissioner Tom Moyane.

President Cyril Ramaphosa appointed retired judge Robert Nugent in June to chair the commission to probe allegations of financial misconduct and governance at Sars during Moyane’s four-year reign.

Witnesses fingered an inefficient new operating model designed by Bain and Co as the reason why the revenue service crumbled, and departments which were crucial to the operational functions of Sars were left fragmented.

The operating model was introduced by Moyane when he took over in 2014.

Witnesses highlighted some of the units which were pivotal and have been fractured, including the ability to measure compliance and the capability to deal with illicit financial flows and high profile investigations.

Today, Fareed Khan, an executive for compliance, said the new restructuring model affected the ability to recover debts owed to Sars.

“There was a decrease in the yield as well as in the number of cases that they were dealing with, which is probably not an indication as to what were they trying to do. But the operation model, in my opinion, disempowered them.”

He said the consulting firm  proposed three senior managers in three regions which never had a footprint.

“It shows how unaware they were of the realities on the ground.”

Khan was asked whether there were any advantages to the new operating model.

“I can’t think of any advantages. We were trying to fix something that was working,” he replied.

Khan warned that the compliance division is the engine room of Sars.

“If we don’t capacitate correctly, we are going to slip and we are going to slip fast.”

“The tyres are wearing very thin and we’ll be on the rims very soon,” Khan said at the end of his testimony.

African News Agency (ANA)

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