Senior officials purged from Sars

Johannesburg - The South African Revenue Service (Sars) is reeling from a high-level purge of senior tax officials by new commissioner Tom Moyane, reported sister publication Netwerk24 on Friday.

Senior government officials now fear that Sars – one of the most stable state institutions pre-1994 – “may implode”.

Since his appointment by President Jacob Zuma in September, Moyane has been targeting senior Sars officials who worked alongside Minister Pravin Gordhan in building Sars into a world-class revenue collection service.

Gordhan headed Sars between 1999 and 2009.

The revenue service has been rocked this week by the resignation of Barry Hore, chief of operations, and the suspension of deputy commissioner Ivan Pillay.

• Although Hore’s departure was presented as a friendly exit, Beeld, part of Netwerk24, has learned that all his technology and modernisation projects were halted by Moyane shortly after his appointment. Hore was widely lauded for establishing the successful eFiling and with modernising the country’s tax systems.
• Moyane’s reasons for suspending Pillay are now being questioned since it emerged a report into the activities of Sars’ investigations unit made no adverse findings against him.
• Beeld has reliably learned that Moyane is considering suspending more senior managers who were part of Gordhan’s top structure.

Three senior treasury sources told Beeld Moyane, the former prison’s boss, is “out of his depth” and doesn’t fully grasp Sars’ complexities.

It is feared that Sars may become a victim of a “power battle to gain control of key state institutions… first it was the police, then the National Prosecuting Authority and now Sars,” a senior civil servant said.

The suspension of Pillay, Pete Richer, group head of strategic planning and risk, and Johann van Loggerenberg, head of investigations, are related to the activities of the National Research Group (NRG), an investigative unit within Sars.

The NRG’s investigations have lead to successful action against drug syndicates, the Zimbabwean businessman Billy Rautenbach, Glenn Agliotti’s drug networks, abalone syndicates and the multimillionaire-businessman Dave King.

As acting Sars head, Pillay appointed advocate Muzi Sikhakhane to probe allegations published against the NRG in the Sunday Times.

Moyane suspended Van Loggerenberg last month and announced last Friday he was also suspending Pillay and Richer based on the findings of the Sikhakhane report.

This reasoning was on Thursday disputed by the comments of Imraan Mohamed, the Sikhakhane panel’s attorney, who told Eyewitness News no findings were made against any third parties.

He said no findings were made against Pillay or Richer.

Last week Friday Moyane said the two were suspended because they were implicated by the panel’s report.

Sikhakhane’s report is still being kept secret, but he presumably found that the Sars did not have the necessary legislative powers to operate an investigative unit that collected intelligence.

A former senior treasury official told Beeld this finding makes no sense. “If you (like Sars) are supposed to fight illegal dealings, you need intelligence.”

Beeld is in possession of a letter signed by Gordhan and former finance minister Trevor Manuel in 2007 about the establishment of an intelligence unit for Sars. The unit would originally have been housed in the National Intelligence Agency (NIA), but was moved to Sars after the NIA changed its mandate.

Supporters of Pillay and Van Loggerenberg say it’s “absurd” that they are now being punished for running an effective crime-fighting unit whose activities were being accounted for throughout.

In reaction to Mohamed’s statements, Sars said Sikhakhane’s report formed the main basis for the suspensions, “along with other things”.

"The suspension is happening to allow for a thorough investigation without any possible interference."

City Press reported in August about the existence of a rogue unit within the State Security Agency (SSA), that had plotted to “remove the leadership of Sars”. It was reported that this was linked to investigations by Sars and the SSA into illegal tobacco smuggling in South Africa.

* For this article and more news in Afrikaans, visit Netwerk24.