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Die Student
Corruption is crippling SARS

Recent events have lead me to believe that the South African economy has suffered continuous blows of corruption throughout the past decade.

The recent increase of VAT levied on the supply of most goods, services and on the importation of goods, resulted in many furious and anxious South Africans. 

One of the major contributing factors is the poor collection of tax by the South African Revenue Services (SARS), as the debt rose from R85 billion in 2015 to a staggering R135 billion.

Ismail Momoniat, deputy director general at the National Treasury, said that the treasury hopes to raise R25-bilion from the increased VAT rate during the 2018/2019 financial year.

He also said the relationship between SARS and the Treasury had become tense under the suspension of previous SARS commissioner Tom Moyane.

He later added that an underlying trend of managers receiving a higher turnover, staff leaving and the mysterious disappearance of units came into light.

“There was a series of bad news to which SARS had no valid explanation,” he said, embedding controversial personal opinions towards Moyane.

Restructuring

Shortly after Moyane’s arrival at SARS in 2014, he sought out to enforce a restructure of the organization. Quickly Moyane crippled SARS’ enforcement capabilities by disbanding national projects, central projects, the high-risk investigation unit and the evidence management and technical support unit.

These units were responsible for the investigation on allegations of corruption against former president Jacob Zuma, Julius Malema and the investigation of underworld figures such as Lolly Jackson and Mark Lifman.

The then newly appointed commissioner worsened the downward spiral when he appointed 45 new executives, resulting in more than 50 executives with institutional knowledge and experience of tax collection leaving the organisation for the private sector.

Recent events have lead me to believe that the South African economy has suffered continuous blows of corruption throughout the past decade.

Moyane’s seconds-in-command Jonas Makwakwa and Kelly-Ann Elskie were charged with alleged fraud and corruption by the Financial Intelligence Centre (FIC). Makwakwa appointed the National Integrated Credit Solutions (NICS) as one of eight debt collectors to assist SARS in reinforcing the tax body’s debt collections and uncover the billions of rands owed to the revenue service.

Around R1.2 million was traced by the FIC to a payment from the Department of Water and Sanitation to the NCIS. That amount evidently ended up being paid to Makwakwa over six years.

By the end of the 2017/2018 financial year the government ended up with a R50 billion hole in its budget after revenue came up short.

The start of November hinted at a turning point for the South African economy when pres. Cyril Ramaphosa noted the calls of the Nugent inquiry and followed their ruling to fire the suspended SARS commissioner Tom Moyane.

Corruption

Nugent summarised Moyane’s tenure as his legacy of failure and corruption that turned the tax institution, a once hailed world-class system, on its head.

Acting commissioner Mark Kingon is highly viewed by Ramaphosa to fill Moyane’s shoes. Section 6 (1) of the South African Revenue Services Amendment Act No. 46 of 2002 clearly states that Ramaphosa can appoint any worthy candidate of his choosing.

There is, however, no assurance that Kingon will be appointed the position. SARS, the supposed blueprint and benchmark for the South African economy, neglected its sole purpose of providing and supplementing economic growth.

I strongly believe that with the coming of the next financial year, Ramaphosa should appoint an appropriate candidate better suited for the role of SARS commissioner and not neglect the presence of corruption in the South African economy.

  • Christiaan Venter (22) studies BA Communication and Psychology at the North-West University in Potchefstroom. He comes from Johannesburg.
  • This article has also been translated into Afrikaans. To read the Afrikaans version, click here.

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