Former finance minister Trevor Manuel.
Cape Town - The South African Revenue Serivce cannot be made a political football, said former finance minister Trevor Manuel as tensions reach boiling point between Finance Minister Pravin Gordhan and SARS head Tom Moyane.
The quality of South Africa's democracy is thrown in the spotlight since issues surrounding the National Budget are political, he said as part of a panel of progressive thinkers at a KPMG breakfast discussion on the Budget Speech that was delivered by Gordhan on Wednesday.
Manuel acknowledged that the Budget Speech was delivered under difficult circumstances.
“Minister Gordhan had to stand up and deliver a speech amidst current administrative weaknesses and growth issues facing the country." He said this had made the budget process a difficult enterprise to manage.
R530bn for provinces
Manuel pointed out part of the problem that Treasury is facing is that more than R530bn is allocated to provinces.
“This means that the provinces can do whatever they want with that money, leaving Treasury with no say over what happens to the spending thereof, or lack thereof.
"These are the fundamental discussions that must be tabled and filtered down to the level of the State of the Province Addresses,” he suggested.
Commenting on state-owned enterprises, Manuel said there needs to be a solid developmental mandate of these institutions.
It was on supply chain management where the former minister delved more. “Without any doubt,” said Manuel, “supply chain is a nest egg for corruption and the unfortunate part is that the poor are always victimised by the failures of supply chain management.”
During the panel discussion, Manuel emphasised that SARS cannot be made a political football.
READ: Don't personalise Treasury/SARS issue - Gordhan
At a media briefing on Wednesday ahead of his Budget Speech, Gordhan expressed concern over revenue collection, which was more than R30bn short of the target stipulated in the 2016 budget – the largest deficit in eight years.
The R30bn deficit for the 2016/17 financial year, according to the 2017 budget, was attributed to:
- Customs duties being down by R6.5bn as a result of contraction in real terms in imports;
- Value-added tax (VAT), similarly being dragged down by import VAT collections to an underperformance by R11.3bn;
- Personal income tax, for long the anchor of revenue collections, underperforming by R15.2bn.
On Friday it was revealed that the relationship between Gordhan and Moyane was so strained that President Jacob Zuma was requested to intervene in the matter.
READ: Moyane admits: My relationship with Gordhan is strained
Moyane accused Gordhan of treating him like a "nonentity", refusing to shake his hand and shouting at him during meetings.
“I am waiting for the president to revert with regard to the appointment of a referee to adjudicate differences between the minister and SARS. In light of the pending adjudication, I am not able to divulge further details,” Moyane said.
Since Moyane took over as commissioner, many key executives with institutional knowledge have left SARS. He also instigated the probes that looked into an investigation unit at SARS, which resulted in the Hawks investigating Gordhan’s role while he was commissioner.
The National Prosecuting Authority was caught in the storm when it announced and then withdrew charges against Gordhan related to the retirement package of Ivan Pillay, a former SARS executive.
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