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Taxpayers Cannot Simply Accept Moyane's Word When A R23 Million Investigation Has Been Discredited

His insistence to implement what has clearly become a discredited report should raise an alarm.

21/09/2017 03:58 SAST | Updated 21/09/2017 03:58 SAST
Gallo Images/ Rapport/ Deon Raath
South African Revenue Services [SARS] commissioner Tom Moyane.

On Monday, SARS Commissioner Tom Moyane once again assumed his very familiar role –- that of the victim. Only this time, he launched a scathing attack on the auditing firm KPMG in a dismal attempt to convince South Africans that he is defending the proud institution he represents. But Moyane's response to KPMG's latest statement has exposed him as one dead set on driving the narrative of a nefarious 'rogue unit' within the revenue service.

Analysing the statements
On Friday, KPMG caught the taxman off guard when it announced the conclusions and recommendations of its investigation into the so-called 'rogue unit' at SARS "should no longer be relied upon". It is important to pause here because the immediate assumption was that the entire report had been withdrawn and the investigation nullified as a result. This is not the case. It is equally important to note that the 'limited withdrawal' does not necessarily mean that any of the aspects of the report still stand.

What it does mean is that a new and independent investigation needs to be conducted –- one that does not assume the submissions made by SARS's own legal teams as fact. After all, that was KPMG South Africa's biggest mistake. The statement reads: "KPMG South Africa acknowledges that such opinions should have been caveated as recommendations of legal advisors and not formulated in the manner contained in the report" -– that is as factual findings. And this is also where Moyane exposed himself.

Is SARS hunting the right witches?
The commissioner insists the report is valid, despite his attempts to entirely discredit the company that compiled it. Under different circumstances, the client –- being SARS in this case -– would call for another probe, given the questions now hanging over the initial report. It would not only want new investigators to look into the original case but would also want answers on why there were shortcomings in the KPMG investigation.

Moyane should be demanding answers on a range of issues, including why his own lawyers' opinions were included as factual in the report; why KMPG failed to follow proper procedure and; why those implicated in the report were never given an opportunity to state their case. This is especially important given the fact that individuals' careers, reputations and in some cases, their freedom is at stake. But Mr Moyane is not interested in the truth. Instead, he attacks KPMG for admitting that the report was flawed.

Apart from the discrepancies in Moyane's remarks on Monday, his insistence to implement what has clearly become a discredited report should raise an alarm.

"SARS sees KPMG's conduct as nothing else but a dismal attempt to portray SARS, its leadership, and in particular SARS Commissioner as incompetent, corrupt, inefficient and involved in a witch-hunt," Moyane told reporters in Pretoria on Monday morning.

Interestingly enough, Moyane threatens legal action against KPMG for its "abhorrent, unethical, and unprofessional conduct" and also wants, among other things, for the auditor to be blacklisted. However, he still insists on taking disciplinary action against those implicated in the report with the possibility of criminal prosecution. That is unless possible legal action against KPMG is for the auditor admitting its errors as opposed to its unprofessional conduct in the administering of its investigation.

Taxpayers need answers
Apart from the discrepancies in Moyane's remarks on Monday, his insistence to implement what has clearly become a discredited report should raise an alarm. Parliament's Standing Committee on Public Accounts says it does not care about the politics involved around the 'rogue unit', but wants KPMG to explain how such a firm could get itself into this position. Rightly so, KPMG needs to answer for its conduct, including why the report was not "subjected to second partner review" –- as is required by its own standards.

But Moyane also has to answer for his own conduct. Why is there such an urgency to take action against individuals involved in a unit the former finance minister Pravin Gordhan says operated within the confines of the law? Whether Moyane wants to prove his competence or ensure the "capture of a vital state institution" –- as Gordhan put it, taxpayers cannot simply accept his word when a R23 million investigation has been discredited.