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Johannesburg – Unethical, questionable and disingenuous are some of the words Commissioner of the South African Revenue Service (SARS) Tom Moyane described audit firm KPMG’s conduct.
Moyane was speaking at a briefing on Monday, following reports that KPMG was retracting parts of the "rogue unit" report. He laid into the audit firm, saying that its conduct was unethical and was an attempt to portray SARS and its leadership as incompetent, corrupt, inefficient and involved in a witch hunt.
On Friday KPMG released findings based on an internal investigation, where it said that failure on its part to “appropriately apply” its own risk management and quality controls, part of the report referring to conclusions, recommendations and legal opinions can no longer be relied on.
SARS is considering taking legal action against KPMG as it endured reputational harm. Further, SARS is of the view that KPMG waived its rights as author of the report when the final report was submitted to SARS in January 2016.
Fin24 compiled 10 quotes from Moyane where he defended SARS and hit back at KPMG.
The rogue unit existed
“We can confirm by the reports that we have and we would like to stand by the reports that we have as management, that there is prima facie evidence that the [rogue] unit existed until I disbanded it… Once it came to my attention I took the right decision to disband it.
“The members of the unit were surfaced and of course had to go through a process of debriefing and being brought back into the organisation.”
Veracity of KPMG report
“I want to say the report by KPMG is not flawed. In fact the report confirms conclusively, deeply so that there is prima facie wrong-doing in this organisation. There were people involved in serious problems not tax related.”
Why KPMG was mandated
When asked why SARS had commissioned KPMG to conduct an investigation into the "rogue unit", following the Sikhakhane Commission’s report, Moyane said it was a matter of getting a second opinion.
“Any person who occupies a position of authority and responsibility at times wants to have second opinion.
“We gave them all the reports in order for them to have an independent opinion and assessment without due influence of the leadership.”
KPMG’s questionable reports
Moyane said the fact that KPMG wanted to retract parts of the final report a year and a half later brings into question whether the firm ensured quality assurance of all its reports.
“It borders on giving us a sense that the organisation has failed to conduct its activity despite the terms and conditions for which this work given to us, in good faith… A year later and to say the contents cannot be relied upon borders on creating a perception to the public that SARS is not an organisation you can trust and casts aspersion to the leadership thereof.”
He also commented that it was strange seven executives had resigned based on one report.
Legal action against KPMG
SARS is yet to consult with its legal team to consider action, if any, to be taken against KPMG.
“KPMG should be held accountable. KPMG must be accountable for all the things they have written to us which we have confirmed and accepted as a final report to us.”
He added: “This thing did not happen overnight … they knew about it. They should have come to us earlier.”
Allegations against Pravin Gordhan
Moyane said that it was up to the relevant authorities to prove or disprove allegations against former finance minister Pravin Gordhan.
“The investigation is taking place. I am not in a position to judge conclusively, it is the investigation.”
Purge of competent employees
Moyane said that the organisation has been on an “upward trajectory”.
“We have collected revenue, met the target and surpassed the target. And we are proud of the work… We have men and women who are capable. Men and women running this institution and have all the experience to run a tax administration.”
He went on to say that if SARS did not have competent leadership the organisation would have “completely fallen” through the cracks.
No fear or favour
“At no point have we failed the South Africans. We are grateful that we can report to stakeholders and all taxpayers that we do our work openly without fear or favour. And we treat all taxpayers without any favour whatsoever.”
Unmasking those driving an agenda against SARS
Moyane said that reports in the media create uncertainty and instability, causing distrust in the ability of the organisation to perform its function.
“People feel we have an institution that is unable to run its affairs… I do not have a particular name or persons. The agenda is clear to cast aspersion.
“My ability is to make a team strong and able to collect all revenues due, and create a climate where South Africans can trust the organisation.”
Threats to his life
Moyane confirmed reports that he told Parliament his life was threatened. Referring to a trip to Paris where he had to attend a meeting, Moyane said he became seriously ill.
“The South African High Commissioner had to find a doctor to attend to my illness…One wonders as to what could have happened. I can confirm there have been funny phone calls that one receives.
“You never know when one’s life is at stake, I am watched.”
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