POLITICS

EXCLUSIVE: Exodus At Moyane's Sars Continues

The loss of skills and critical talent at the taxman is continuing unabated -- and it's being pinned on Tom Moyane's overhaul of Sars' operational structure.

12/12/2016 17:48 SAST | Updated 15/12/2016 22:44 SAST
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Tom Moyane, Sars commissioner, during his days as commissioner of correctional services.

The exodus of skills and talent at the South African Revenue Service (Sars) is continuing unabated with further resignations at senior level rocking the taxman in the first week of December.

Vusi Ngquluna, group executive for debt collection has handed his resignation to Tom Moyane, Sars commissioner, and has started serving his notice period, two insiders familiar with the internal processes at Sars told Huffington Post South Africa.

HuffPost SA initially understood that Franz Tomasek, group executive for legal policy and research, may have also resigned but Sars has since denied this.

Ngquluna's resignation follow a host of senior staff leaving Sars over the last year, the investigation into Jonas Makwakwa (a member of Moyane's executive management team) and the continuing war between Sars and the National Treasury.

When contacted for comment Tomasek did not confirm or deny his resignation but referred all queries to Sars.

Sandile Memela, Sars spokesperson, has denied Tomasek's regignation and confirmed Ngquluna's.

Almost the entire senior management team of Sars has left the institution since Moyane was appointed commissioner in September 2014, ranging from deputy commissioner Ivan Pillay, chief operating officer Barry Hore, chief enforcement officer Gene Ravele, as well as a host of group executives, executives and senior managers. Kosie Louw, the longest-serving member of Sars' executive and an internationally renowned tax-expert, also resigned last month.

Almost the entire senior management team of Sars has left the institution since Moyane was appointed commissioner in September 2014.

Insiders, with direct knowledge of machinations at Sars' headquarters in Pretoria, say senior staff are demoralised, sidelined and "fed up" with the state of affairs at the institution. They say Ngquluna's imminent departure is"directly linked" to the new operational structure.

The loss of Ngquluna is considered to be a heavy blow to stability at the institution, especially given the recent turmoil, the stiff tax collection targets and the overhaul of Sars' operations.

Insiders, with direct knowledge of machinations at Sars' headquarters in Pretoria, say senior staff are demoralised, sidelined and "fed up" with the state of affairs at the institution.

Ngquluna's decision is apparently related to the outsourcing of debt-collection to third parties, of which one contract was recently handed to Lekgotla Outsourcing, a company owned by Moyane's nephew, Nhlamulo Ndhlela. Sars said in a statement at the time that the Moyane was not aware of his nephew's involvement. The contract was subsequently scrapped.

All tax collection offices in the country report to Ngquluna, with collection being Sars' core business. His office is especially important, given the flat economy and Sars' growing debtors' book. The decision to outsource some of his office's function was allegedly taken without his input, with the furore around Moyane's nephew being a serious bone of contention. Insiders say his resignation will be a serious blow to Sars' efforts to ensure revenue targets are reached for the 2016/2017 financial year. National Treasury is forecasting a shortfall of R23 billion.

Insiders say his resignation will be a serious blow to Sars' efforts to ensure revenue targets are reached for the 2016/2017 financial year. National Treasury is forecasting a shortfall of R23-billion.

"He is leaving because he doesn't agree with the outsourcing of debt-collection. Sars tried it years ago and it didn't work. Even the private sector said it isn't a good idea. The decision (to outsource) was taken without him and without taking into account the requirements of Sars' core business," a source with first-hand knowledge told HuffPost SA, who described Ngquluna as "clinical and professional".

"Sars needs to tackle its debtors' book and try to recover as much as it can. Now the guy who was in charge is leaving, and somebody else will have to start anew."

The LBC has been gutted over the past year, with almost the whole of its senior management team leaving, including group executive and LBC manager, Sunita Manik. The LBC's mandate is to work with big corporate taxpayers and to find solutions to tax issues, with corporate tax being one of Sars' main revenue streams.

The LBC has been gutted over the past year, with almost the whole of its senior management team leaving.

Besides Ncquluna, 2016 also saw the resignation of a number of other senior Sars staff members, including Elle-Sarah Rossato, who was in charge of a specialised legal and debt management team within the enforcement unit. She was responsible for the global protection order granted to recover assets from the billionaire Dave King (including the attachment of his private airplane in France) and managed the recovery of more than R6 billion in "special debt". She now works for KPMG.

Other Sars losses include Vusi Ngcobo, who was posted in Beijing and has left to take up a position with Afghan customs, as well as one of the institution's top investigators, Asham Khan. In addition, almost all of Sars' enforcement units have either been merged or shut down since Moyane's arrival, with almost everyone at the indirect tax unit and the LBC's transfer pricing unit resigning in 2015, sources with direct knowledge of events say.

Almost all of Sars' enforcement units have either been merged or shut down since Moyane's arrival.

All these resignations are related to the new operational structure introduced by Moyane after he was appointed commissioner by President Jacob Zuma in September 2014. This structure is now the subject of an investigation by the Davis Tax Commission (DTC). The scope of the DTC's mandate, normally limited to the consideration of tax policy, has been broadened by Gordhan to include an investigation into Sars' operational structure.

Corruption Watch, a non-governmental organisation, on Monday also laid criminal charges against Moyane, Makwakwa and Kelly-Anne Elskie (also a Sars employee and Makwkwa's partner), for their handling of and involvement in Makwakwa's suspicious deposits of large amounts of cash.

Memela, in a statement sent days after a request for comment was made and this story published, said the report of Tomasek's resignation was factually incorrect.

"(It) has caused much embarrassment, distress and alarm for both Tomasek, his colleagues, Sars staff and Sars.

"Also, the story creates a misleading impression that the resignations of Ngqulana will undermine the attainment of revenue targets for 2016/17. This is inaccurate as revenue collection is an enterprise-wide drive.

"As for your request for comment on the purported resignations, kindly note that SARS is prohibited by its HR practises from divulging employee information in the public domain as these are matters between the employer and the employee."

He did not comment on the other resignations.

* A previous version of this story reported Tomasek's resignation as fact. We apologise for the error. This story was updated on December 15 2016 to reflect Sars' comment.