R23m was spent on KPMG for its Sars investigation, says Gordhan

Pravin Gordhan
Pravin Gordhan

The state spent more than R23 million for auditing firm KPMG to investigate the South African Revenue Service’s so-called rogue unit. 

Finance Minister Pravin Gordhan revealed in a written parliamentary reply published this morning that R23.1 million was spent on KPMG and the firm investigated the allegations made in respect of an investigative unit within the tax department. 

Gordhan was responding to a written question from Economic Freedom Fighters’ chief whip Floyd Shivambu, who wanted to know about the costs incurred by Sars for the services of a company in their investigations into “a certain person and other former employees of Sars”. 

Shivambu also asked Gordhan if there had been an open tender process for the appointment of the company and details around the terms of reference. 

In his response, Gordhan wrote: “The South African Revenue Service has submitted the following information. Please note that the minister is unable to verify the content…” 

Gordhan said an already existing panel was utilised for this purpose [the investigation] that was previously appointed through an open tender process in terms of the national treasury supply chain management. 

“The terms of reference of the mentioned company was to perform a forensic investigation based on the recommendations of the Sikhakhane report to institute a more detailed investigation and to provide evidential support to the findings made,” said Gordhan. 

KPMG was commissioned by Sars commissioner Tom Moyane in December 2014 to conduct a forensic investigation into the so-called “rogue unit” at Sars. 

The investigation into allegations of irregularities and misconduct within Sars by KPMG made a number of damning findings against senior executives and called for an investigation into Gordhan 

At the time, Gordhan slammed KPMG over its report which was leaked to the media, and which appeared to confirm allegations regarding a rogue spy unit within the revenue service. 

Gordhan said he and other people named in the report weren’t able to give their side of the story.

Shivambu said: “It's apparent that Sars is determined to expend millions of rands to pursue narrow political battles which later prove to be meaningless. KPMG has come to say that its report is not conclusive, yet R23 million has been wasted already. 

“We are aware that even in the case of the EFF commander in chief, Julius Malema, Sarsspent more than R20 million chasing a R4 million tax bill, most of which has already been settled,” he said.

Shivambu said the EFF had hoped that once those associated with [Finance Minister Pravin Gordhan] were gone, “there will be change, but it looks like Commissioner Moyane is replacing a tendency with a tendency - and that's not good because it will overload the work he is doing”.

He said Sars shouldn't be used as a political persecution instrument of factionalists. 

“We [EFF] are going to demand an urgent meeting with Sars to demand accountability,” added Shivambu.

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