'Institutional chaos', budget cuts as SARS battles to 'keep the lights on', Inquiry hears

The Chief Officer of SARS Digital & IT on Wednesday painted a picture of an organisation under strain from ageing technological infrastructure that poses a risk to revenue collection.

Mmamathe Makhekhe-Mokhuane said the IT infrastructure at the South African Revenue Service (SARS) – intended to "enable the organisation to realise its mandate" – was in disarray and not aligned with the tax service’s strategy.

Central to the challenges are budget cuts and an inability to service the ageing infrastructure.


Makhekhe-Mokhuane spoke of "institutional chaos" at SARS.

Additionally, there had been severe budget cuts. The unit in March required R388m, but only received R88m.

"There is no strategy and there is no direction…our job now is to try and keep the lights on," she said.

She conceded that there were "serious challenges" at SARS, posing a risk to the organisation's ability to fulfil its mandate.  

The lack of strategy, as described by Makhekhe-Mokhuane, is despite a document drafted by advisory firm Gartner, which was granted a R200m tender to review SARS's IT system in 2015.

Other executives who testified this week indicated that Gartner's strategy had not been implemented.

During Makhekhe-Mokhuane's testimony, she appeared to struggle to remain focused on the topic at hand.

She referred to failure by the North West province to meet its revenue target of R10.6m, only collecting R10.3m, a shortfall she blamed on IT shortcomings. 

The SARS digital hardware infrastructure has not been upgraded since 2014, according to information that emerged from the hearing.

"I can confirm that there are no resources to do the things that we want," said Makhekhe-Mokhuane.

'SARS degenerating as tech advances'

On Monday, Andre Rabie, acting group executive for IT strategy and enterprise, estimated that it would cost approximately R1bn to fix the agency’s digital systems.

IT challenges at SARS have been blamed on suspended commissioner Tom Moyane’s halting of a modernisation programme in 2014. Moyane terminated the system shortly after his appointment.

The halting of the modernisation programme was followed by the appointment of Gartner to design an IT strategy for SARS, in a contract that has been criticised for flouting tender regulations.

In his interim report to President Cyril Ramaphosa, Judge Robert Nugent, who is heading the inquiry, recommended that Moyane be removed from his position.

"What is clear to the Commission is that SARS reeks of intrigue, fear, distrust and suspicion. We have heard of it repeatedly in evidence, and we have encountered it ourselves," read the report.

"The trajectory of modernisation, that had been in the making for a decade, was summarily stopped when the current Commissioner, Mr Tom Moyane took office on 27 September 2014, and the systems are degenerating as technology advances."

The inquiry is expected to make its final submission by end of November.

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