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SARS Inquiry hears internal investigations unit broke down under Moyane

Sep 26 2018 13:32
Sibongile Khumalo

A senior SA Revenue Service employee in the tax agency's investigations unit on Wednesday detailed how the agency's internal anti-corruption unit was clipped of its wings after the arrival of now suspended SARS commissioner Tom Moyane.

The witness, who cannot be named due to the nature of her work and proximity to sensitive criminal investigations, was testifying at the Nugent Commission of Inquiry in Pretoria. The commission, appointed by President Cyril Ramaphosa, is probing the state of corporate governance and allegations of misconduct at SARS.

She said the destabilisation of the agency's internal anti-corruption unit had drastically reduced the capacity of SARS to fight against crime syndicates, which contributed to a decline in staff morale.

She said a sudden process of 'decentralisation' - implemented at around the same time as the agency's business operating model was overhauled in consultation with global consultancy Bain & Company - was described as “urgent” and meant to improve capacity. Instead, the restructure achieved the opposite.

“The anti-corruption unit was restructured with urgency while the new business model was being planned,” she said.

The unit, which was once won accolades as one of the best in government, was lumped together with the auditing division. It was reduced from handling critical investigations - including cases involving tobacco syndicates - to looking into minor cases such as fraudulent staff sick notes and travel claims.

“We felt that placing the anti-corruption under internal audit was a mistake,” she said.

"The internal audit is the third line of defence, ours is the first line of defence. The mixing of these lines of defence is incorrect,” she said adding that pleas against the move were not considered.

She further testified that members of the unit received a letter saying all posts in fraud investigations had been placed on hold, and that Bain and Moyane were reviewing the scope of the team.

“We were not combating corruption in the same strength as before,” she said of the impact of destruction of the unit.

The commission has heard that no investigation into the illicit tobacco industry has taken place since early 2015.

Previous senior SARS managers have testified that the lack of investigations led to a loss of hundreds of millions of rands in revenue and a general decline in tax compliance.

The acting SARS Commissioner, Mark Kingon, has said SARS plans to re-establish the unit.

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