South Africa 30.8.2018 07:48 pm

Bain blames change of leadership for problems at Sars

The Nugent Commission of Inquiry. Picture: Brenda Masilela/ANA

The Nugent Commission of Inquiry. Picture: Brenda Masilela/ANA

Bain’s restructuring model was supposed to improve Sars’ tax collection, but instead wrecked that capacity and fragmented crucial units.

Consulting agency Bain and Company, which is widely blamed for the disastrous restructuring model which caused the South African Revenue Services (Sars) to lose billions in tax revenue, today said the problems at the revenue services was as a result of several factors, including the widespread change in leadership.

Bain & Company’s  managing partner, Vittorio Massone testified today before the Nugent Commission of Inquiry into the administration and governance issues at Sars.

In 2014, Bain and Co conducted a diagnostic for Sars which informed the business restructuring process. The changes were ordered by now suspended Sars chief Tom Moyane, who at the time had only been in the job for four months.

Massone said the company was never told what was wrong with the old structure and they also did not ask questions.

“In the real world, the client decides and you can’t dictate what they do.”

The new restructuring model resulted in the shutting of the Large Business Centre which was responsible for the collection of tax from big companies and a unit investigating the illicit economy.

However, Massone defended their structure and said it could not have caused all the turmoil and blamed the problem on the change of leadership.

“The change in leadership was too wide and fast, and the communication plan was not properly executed.”

Massone said they interviewed only 33 officials from a list provided by Moyane over six days during the drafting of the operational model which, in turn, resulted in the fragmentation of crucial units in the revenue services.

“In hindsight we should have consulted more, maybe interviewed people (who were) no longer at Sars,” he said.

He added that their involvement was to improve Sars’ tax collection capacity.

Tomorrow, former finance minister Malusi Gigaba and current Finance Minister Nhanhla Nene will tell their stories about dealing with Moyane and his restructured revenue service.

African News Agency (ANA)

ALSO READ: Moyane introduced consulting firm ‘that wrecked Sars’

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