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1 March 2016 – Clarification on recent media coverage

1 March 2016 – Clarification on recent media coverage

Pretoria, 1 March 2016 – SARS has noted coverage in the last week by various media houses. SARS would like to respond to the reported issues.

Various Investigations at SARS

The current SARS investigations mentioned in the media have inferred that the Commissioner instituted such measures. This is far from the truth. The following are important to note:

  • Following media coverage of the alleged “rogue unit” on 11 June 2014, the then acting Commissioner, Mr. Ivan Pillay, instituted an investigation led by an Attorney, Mr. Moeti Kanyane who recommended further investigations given the limited mandate of his investigation.
  • On 3 September 2014 Mr. Ivan Pillay commissioned a further investigation by Advocate Muzi Sikhakhane SC to further investigate the allegations. This is prior to Commissioner Moyane being appointed on the 27 September 2014.
  • The report from Advocate Sikhakhane SC was received by Commissioner Moyane on the 5 November 2014, making various findings on the illegality of the unit and its operations.
  • In addition Advocate Sikhakhane SC advised the Commissioner of SARS to institute a more detailed investigation. This resulted in Commissioner Moyane appointing KPMG in December 2014 to do a forensic investigation and Advocate Martin Bressey SC to work with KPMG in capturing the oral evidence.
    This resulted in more than 30 interviews being conducted.

Media Leaks

Since the appointment of SARS Commissioner Tom Moyane in September 2014, major controls and processes have been instituted to curb information leaks from SARS. The intention is to protect the integrity of the organisation.

We reject any insinuation that suggests that SARS has been leaking confidential information.

The media is encouraged to uphold its code of ethics and standards when it comes to dealing with leaked confidential documents

Operating Model

The notion that Commissioner Moyane has used the implementation of the current operating model for other motives other than enhancing SARS effectiveness and efficiency is rather unfortunate and a deliberate attempt to discredit SARS and its Commissioner.

It must be noted that the current operating model process is not the first one for SARS. Prior to Commissioner Moyane being appointed, SARS had undergone several Operating Model changes under various Commissioners including the current Minister.

The decision to embark on the current operating model was taken by the previous acting Commissioner, Mr Ivan Pillay. This was presented and endorsed by Parliament when SARS under Mr. Ivan Pillay tabled the SARS 2014/15 Annual Performance Plan (APP) to Parliament (“Deliver a refined operating model to eliminate duplication and improve efficiencies and effectiveness of our business practices. By 31st March 2015, SARS will have finalised its review of the SARS operating model. We will use this opportunity to identify areas where we need to build capacity and areas where we need to move capacity to compliance enhancing activities.”) – source: Page 27, Annual Performance Plan, 2014/2015-presented to Parliament.

Commissioner Moyane, on being appointed, implemented the commitment made by his predecessor to Parliament. As part of the implementation, intense consultation which included the concurrence of Minister Nene, organised labour, SARS Advisory Board and various stakeholders.
It is also an unfortunate narrative that Large Business Centre (LBC) has been collapsed as a result of the new operating model.
In fact, as opposed to the previous model in which the LBC was situated in 4 offices nationally, the new operating model has expanded the footprint of the LBC services to the majority of SARS branches.

SARS is also increasing its capacity by recruiting additional specialised skills to deal with clients that are being serviced by the LBC including focusing on Base Erosion and Profit Shifting challenges.

Reported comments attributed to Former Minister, Mr Manuel

SARS has noted with concern the alleged statements in the media attributed to the respected former Minister of Finance, Mr. Trevor Manuel, that “if he was the Minister of Finance he would spend 20 minutes crafting a letter to fire Tom Moyane”. Not only is such a statement puzzling but it also undermines the legislation regulating the relationship between SARS and the Minister. It is expected that the former Minister would be aware that in terms of the SARS Act, in particular Section” (9). The SARS Commissioner is appointed by the President of the Republic, as both the Chief Executive Officer and an Accounting Authority. Such a statement, coming from a former Minister under whose stewardship the SARS Act was amended in 2002.

Section 9 as uplifted from the SARS Act:

(1) The Commissioner –

(a) is responsible for the performance by SARS of its functions;
(b) takes all decisions in the exercise by SARS of its powers;
(c) performs any function and exercises any power assigned to the Commissioner in terms of any legislation or agreement referred to in section 4(1)(a); and
(d) is the Chief Executive Officer and also the Accounting Authority for SARS.

(2) As Chief Executive Officer a Commissioner is responsible in particular for-

(a) the formation and development of an efficient administration;
(b) the organization and control of the staff;
(c) the maintenance of discipline; and
(d) the effective deployment and utilization of staff to achieve maximum operational results.

(3) As the Accounting Authority, the Commissioner is responsible for –

(a) all income and expenditure of SARS:
(b) all revenue collected by SARS;
(c) all assets and the discharge of all liabilities of SARS; and
(d) the proper and diligent implementation of the Public Finance Management Act, 1999

(4) The Commissioner must perform the functions of office as required by this Act.

SARS management and the 14500 employees are hard-working and are committed to fulfilling our Mandate to collect all revenue due to the state.

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