Finance Minister Nhlanhla Nene told the Nugent Commission of Inquiry on Friday that he was forced to appoint the South African Revenue Services (SARS) advisory committee in March 2015, as commissioner Tom Moyane’s attention was focused on the so-called rouge unit, instead of revenue collection.
Nene was finance minister from May 2014 until December 2015, when he was axed by former President Jacob Zuma. He was reappointed to the position by President Cyril Ramaphosa in February.
Nene said that during his first tenure as finance minister, monthly meetings, which he described as "robust", took place with Moyane, but there was "beginning to be an issue with our inability to meet our monthly targets".
He was asked about the decision to appoint international consulting firm Bain & Company to restructure SARS in 2015, which Moyane told the company had been approved by Nene.
Nene said he was informed by Moyane that the decision to procure Bain & Company’s advisory services was to re-launch the SARS brand, as the organisation "was in a bit of a difficult state" following the resignation of SARS commissioner Oupa Magashula due to allegations of improper influence in July 2013.
According to Nene, the intentions behind appointing Bain & Company were "noble", to improve the efficiency of SARS, and as it was an operational matter, he only had to endorse the process and it could have gone ahead without his approval.
Nene testified that he was unable to follow the progress of Bain’s suggested restructuring, as he was removed as finance minister in December 2015.
Bain didn’t achieve objective
He admitted with hindsight that Bain didn’t achieve its intended objective, and said he found it "very strange", as the company had previously been used to turn around the Development Bank of Southern Africa (DBSA).
Nene also told the commission that there should be "some kind of alignment" in the process of appointing the SARS commissioner.
"The relationship between the minister and the commissioner is critical, although legislation doesn’t provide a clear framework."
The current process advertises the position of the SARS commissioner, and applications are submitted to Treasury, who in turn hands them over to the presidency. The president then decides on the name of the tax commissioner, who signs an employment contract with the minister of finance.
Nene said he would support the suggestion by his Treasury colleagues on Wednesday that an advisory board be appointed to advise SARS on operational matters.
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