Suspended South African Revenue Service commissioner Tom Moyane and those loyal to him cultivated an air of distrust and lack of transparency, which continues to fester, even after Moyane’s contentious tenure was brought to an unceremonious end following his suspension.
These were the sentiments expressed by Sars acting commissioner Mark Kingon before the Nugent commission of inquiry – which is looking into allegations of mismanagement at the revenue service – on Friday.
Kingon’s opening remarks set the tone for the rest of his testimony as he revealed that since taking over the hot seat – following Moyane’s suspension – he had come to the realisation that the institution’s leadership was now “wrecked by division and mistrust” leaving it “broken and unstable”.
“I remain concerned over the overall health of our organisation. When I came into office, there were three chief officers’ positions that had been vacated. As much as I have filled them, it still remains true that our executive leadership is broken and unstable and riddled by divisions and distrust,” explained Kingon.
The acting commissioner said the first step to fixing the “mess” at Sars was through admission that there were problems and then following that up with action going towards fixing these problems.
Kingon testified that the distrust at Sars was best epitomised by the extensive surveillance that had been implemented, targeting the organisation’s own staff.
The acting commissioner credited such working conditions to the deteriorating performance of the revenue service.
Kingon also added that some of the divisions were due to the fact that senior managers [under Moyane’s tenure] were disempowered through being deprived of information.
“Significant reports that led to drastic changes at Sars such as the Bain and Company report, as well as the Gartner report, were not openly shared with everyone but information was distributed among cliques,” Kingon said.
Therefore, the free flowing of information had to be reintroduced at Sars when Kingon was appointed.
Kingon was appointed in the acting position on March 19 following the suspension of Moyane and he testified that his appointment put him in an awkward position because this meant that individuals who were previously his seniors now reported to him.
If IT system not improved, we will collapse
Kingon also took the opportunity to clarify the condition of Sars’ IT system, which had been reported to be in a “critical but stable condition” by witnesses giving testimony before the commission this week.
“Our IT infrastructure has deteriorated over the last four and a half years due to lack of maintenance. Our e-filing system is not about to collapse, but if we do not do anything we are likely to get there,” clarified Kingon.
The acting commissioner, however, made it clear that Sars’ digital infrastructure now lagged behind and the termination of the modernisation programme by Moyane had set the organisation back as it now needed to “update its IT system” and then try to “catch up with other revenue services across the world”.
Evidence leader Advocate Carol Steinberg then asked Kingon to clarify the reasoning behind Sars’ spending of close to R1 million of taxpayer’s money on legal services to prepare a staffer to testify at the Nugent commission so that he could “clear his name”.
Sars employment relation group executive Luther Lebelo appeared before the commission in September to “clear his name” on his role in the institution of disciplinary action which led to the suspension of former deputy commissioner Ivan Pillay.
Pillay was suspended twice, on December 5 2014 — a decision he challenged and subsequently secured his reinstatement — and then again on January 21 2015.
Steinberg said that, on July 9, before appearing before the commission Lebelo had applied to get external legal services to prepare him to appear before the commission and the request was approved by the recently suspended head of legal Refiloe Mokoena.
Lebelo received the services of lawyer David Maphakela, a partner at Mashiane Moodley & Monama Inc, to the tune of R759 000 for one month’s services.
Retired Judge Robert Nugent expressed shock over the amount of money spent by Sars in what he described as “trying to dig dirt on the so called rogue unit and link it to Pillay at all cost”.
The commission heard that Sars had spent almost R40 million on legal expenses trying to prove that there was a rouge unit that functioned under Pillay and those associated to him.
Nugent said it was unacceptable that “people were spending taxpayers’ money like it was water”.
Kingon offered an “unreserved apology” on behalf of Sars to South Africa, the government and tax payers for “falling short of the high standards of performance”, Sars officials have always set for themselves.
An emotional Kingon – who had to take a breath to stop himself from crying – also apologised to the president, minister and deputy minister of finance, and former and current staff members of Sars.
Kingon also added that some of the money spent on rogue unit reports had been returned by consulting firms, but did not disclose how much it was.
He also alluded to the fact that he was looking into reinstating officials who were pushed out of their posts at Sars.