Massive failure of integrity, governance at Moyane’s Sars – Nugent report

The final report of the Nugent Commission of Inquiry into tax administration and governance at the South African Revenue Service (Sars) was released this afternoon and handed to President Cyril Ramaphosa.

Following on the commission’s damning interim report, after which Ramaphosa fired then Sars commissioner Tom Moyane, the final report makes recommendations to prevent the “massive failure of integrity and governance” to ever happen again.

Among the many recommendations is that the Sars Act “be amended to make provision for the appointment of an Inspector-General of SARS, with powers comparable to those of a commission of inquiry”.

The functions of the Inspector-General “should be to investigate matters of governance for the purpose of enabling corrective action to be taken. He or she should also be available to be interviewed by persons inside SARS or outside of SARS, being either individuals or representative bodies such as the Institute of Chartered Accountants.”

A deputy commissioner of Sars should also be appointed by the president, after consultation with the minister of finance.

It is also recommended that “provision should be made in the Sars Act for the removal of the commissioner of Sars by the president on specified grounds, through a process that is transparent”.

In appointing a Sars commissioner, the “candidates should be, and be reputed to be, of unblemished integrity; have proven experience of managing a large organization at a high level; not be aligned to any constituency, and if so aligned, should renounce that alliance upon appointment.”

These candidates should submit to a private interview by a panel of four or more members selected by the president.
Members of the panel “should be apolitical and not answerable to any constituency, and should be persons of high standing who are able to inspire confidence across the tax-paying spectrum.”

More specifically, the report recommends “that SARS takes steps to recover from the former Commissioner [Moyane] legal costs and expense incurred by SARS for litigation commenced and instructions given”.

It also recommends that the National Director of Public Prosecutions should consider prosecutions in connection with the award of the Bain & Co contracts.

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Sars should also “re-establish capacity to monitor and investigate the illicit trades, in particular the trade in cigarettes”.

The new Sars commissioner should “conduct a performance review of EXCO members appointed by Mr Moyane, taking account of their capacity for senior management, their appreciation of good governance, and their capacity for inspiring public confidence in the integrity of Sars”.

The report furthermore recommended that “the Large Business Centre be reestablished, that the Compliance Unit be re-established, and that a high-level Integrity Unit be established.”

Ramaphosa said he is studying the findings and recommendations and is applying his mind.

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