Tshitangano says the tender for the SARS “turnaround plan” period of was “very short”, about a week. 

This was under the 21 days that usually applies. 

Tshitangano says Treasury never received any letters from SARS on why the tender period had been reduced to about a week, and why the tender was put out in mid-December. 

He says a number of issues around the tender was “very strange”. 

“My suspicion is that Bain may have  … been approached, were aware of the scope [of the tender] and may have started preparing [before other consultancies were briefed].”

He says he still needs to get feedback on these issues. 

Moyane Russia trip still shrouded in mystery

A mysterious trip to Russia by suspended SARS commissioner Tom Moyane in November 2017 – on the taxpayer’s tab – still cannot be explained.

The trip became a hot topic during minister Malusi Gigaba’s testimony at the Nugent Commission of Inquiry on Friday.Gigaba was grilled on the trip by evidence leader Advocate Carol Steinberg, as he had approved the trip without getting any clarity from Moyane, who was in Russia from November 18 to 23, 2017.Gigaba was the minister of finance at the time.

Moyane, who couched the trip as an urgent meeting with his Russian tax counterpart, meanwhile was expected to provide a feedback report upon his return.

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‘This is insane’ – Davis on Bain SARS restructuring plan 

Davis says that during his time on the Davis Tax Committee – appointed by then minister of fiance Pravin Gordhan before Moyane was appointed as SARS commissioner  – the committee was not given the final report on THE proposed restructuring of the tax agency’s working operational model done in consultation with consultancy Bain. 

“I never understood what the need for this restructuring was,” he said. 

He only saw some some of the plans before the changes were instituted 

“Mr Moyane wouldn’t give us one [final report]. In many instances we couldn’t get figures [from SARS],” he said. 

He appears to have later seen the report, however. 

He says that, in time, his relationship with Moyane and other top SARS officials became “incredibly unpleasant”.

The relationship started to go downhill after he was misquoted in a newspaper article. The article was fixed. 

“Our information dried up. We  [The Davis Tax Committee] were working without any cooperation from SARS at all”. 

Davis has now finished his testimony. 

Officials feared to speak out about problems at SARS – Davis 

Davis tells the commission that “everything that is coming out now was known”. 

He gives the example of problems with VAT refunds, saying that it was known that this was an issue within SARS during the tenure of Tom Moyane. 

But officials feared to speak out. 

He says SARS officials spoke to him privately about problems. “[They spoke about] all the stuff that is now coming out in the public domain … they feared for their jobs.”

Davis adds that it must be made easier for whistle blowers with the tax agency to come forward without fear of repercussions.

New procedure to appoint commissioner? 

Nene is asked by the evidence leader to wallk the commission through the appointment procedure for the SARS commissioner. 

He says the post is first advertised, and then applications are forwarded to the presidency. The president then appoints the commissioner. 

Evidence leader Steinberg says that, according to Gordhan, the process to appoint the commissioner should include shortlisting, rigorous interviews, competence testing, and more. 

Recommendations should then be made to Cabinet, and then sent to the president. 

Nene says he would support anything that would result in the selection of the best candidate for the job. He says he does not want to go into details, but it may make sense for Parliament to be involved in the process of choosing the candidates. 

Nene adresses change in operational working model

Finance Minister Nhlanhla Nene has started his testimony. He is asked by the evidence leader about the 2015 restructure of the tax agency’s operational working model, which took place during his first stint as finance minister.  

“The intentions were noble indeed,” says Nene, who says he received two memos from now suspended commissioner Tom Moyane about the matter. 

Nene says that – in terms of legislation – the change in the organisational model was an operational matter, and the changes could have gone ahead without his approval. 

The commission has heard that the change in SARS’ operational working model hurt the agency’s tax revenue collection abilities. 

Asked by Prof Michael Katz, Nene says he approved the process of the restructure, not the results of the restructure. 

‘Suspicious’ Russian trip by Moyane 

Evidence leader Adv Carol Steinberg now brings up a request that Moyane made in late 2017 to visit Russia. 

Steinberg says the commission received a letter from SARS acting commissioner Mark Kingon about the trip two days ago. 

“There is an urgent need for me to work with the head of the Russian federal tax service,” states the request made by Moyane, according to the letter. He was in Russia between November 18 and November 23, 2017. 

Steinberg notes that, according to Kingon, the international relations team at SARS were not aware of the trip. “[The] Circumstances and secrecy of the trip are suspicious,” states Kingon in his submission.  

“I think the commissioner should be required to provide details,” says Gigaba. “I myself would be keen to know what was the purpose of the trip.” 

Gigaba says he received no feedback from the commissioner after the trip. He says the request was given the green light because it was “urgent”. 

“I expected there would be a report submitted afterwards,” he says. He says at the time the request was made he had no reason to be suspicious of anything. 

This week the inquiry heard from Treasury’s Deputy Director General Ismail Momoniat who said that the increase in the VAT rate to 15% would not have been necessary if there was not a shortfall in SARS revenue collection.

Earlier this month Momoniat told Parliament that the finance minister would wait for the conclusion of the inquiry before tabling amendments to the SARS Act.

The changes to legislation, announced by former finance Minister Malusi Gigaba in February, are intended to improve the accountability of the tax agency to the finance minister.

This was on the recommendation of the Davis Tax Committee’s report on tax administration published last year, Momoniat told Parliament.

Global consultancy Bain & Company also appeared before the inquiry this week. In 2014 Bain conducted a diagnostic for the tax agency which ultimately led to the controversial restructuring at SARS under suspended Commissioner Tom Moyane.