‘Nothing prepared Sars against state capture’ – Ramaphosa

President Cyril Ramaphosa said it is crucial that the South African Revenue Services (Sars) continues to pursue its mandate without fear, favour or prejudice, and nothing could have prepared the tax collector to protect itself against state capture.

The president was speaking during the revenue services’ silver jubilee.

"Beyond its revenue and compliance mandate, @sarstax was created to have a transformative impact."

Address by President @CyrilRamaphosa on the occasion of the 25th Anniversary of the South African Revenue Service, SARS Headquarters, Pretoria. https://t.co/dwYiDO5cCL pic.twitter.com/x8xJ09a4WG

— The Presidency 🇿🇦 (@PresidencyZA) October 14, 2022

State capture

Ramaphosa said the while the occasion marked 25 years of success for one of the state’s finest institutions, it was not prepared for state capture and South Africans lost trust in the institution.

He said the country was grateful for the assistance that Sars received in its formative years from others such as the Swedish tax authority, the Australian and Canadian revenue authorities, and many others.

“This assistance helped to accelerate the pace of learning for Sars during that early period. Unfortunately, none of those lessons could not have prepared Sars to protect itself against well-orchestrated capture by self-serving individuals who were not only unbothered by the higher purpose I spoke about but were in fact hostile to it.”

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Nugent commission

“In 2018 I instituted the Commission of Inquiry headed by Judge Nugent to investigate the state of a revenue collector that had deteriorated from a world class institution to one in which taxpayers and the public no longer had any trust,” Ramaphosa said.

Ramaphosa said this resulted in a decline in revenue performance in the years 2014 to 2018.

“It became clear to us that this important institution of our democracy had been repurposed to serve the interest of corrupt and politically connected persons.”

“The most damning finding of the Commission of Inquiry was that there was a massive failure of governance and integrity at Sars, facilitated by the deliberate dismantling of tried and tested organisational arrangements,” he said.

Optimal performance

Ramaphosa added that for Sars to deliver optimally on its work, it is critical that all taxpayers and traders comply with their legal obligations.

“Over the past few years, Sars has been accessing data locally and across the world to help the organisation to detect and act against non-compliant taxpayers and criminal syndicates.”

“To those compliant taxpayers who meet their legal obligations, I salute you. It is your compliance that enables Sars to fulfil its mandate of collecting all the revenue that is due. The path of transformation of Sars to what it is today has been a long journey,” Ramaphosa said.

Sars an example for other entities

Ramaphosa said Sars is an excellent example of a government entity that is efficient and effective.

“The encouraging progress of rebuilding Sars is evidence that it is possible to arrest and rebuild ourselves from the deep damage we suffered during state capture. I would like to encourage Sars to continue in this vein, and to inspire other government departments and entities to follow suit,” Ramaphosa said.

Ramaphosa thanked Commissioner Edward Kieswetter and the more than 12 500 Sars employees for their efforts.

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