22/02/2017 17:34 SAST | Updated 22/02/2017 18:00 SAST

Gordhan Ratcheting Up The Pressure On Moyane

The minister of finance made no bones about the importance of Sars in South Africa's fiscal framework. He helped build Sars, he's not about to let it go bust.

Pravin Gordhan has said he can't trust information given to National Treasury by the South African Revenue Service (Sars) — he's now been to see Sars head Tom Moyane four times in four weeks.

During a press conference on Thursday, ahead of his seventh budget speech, Gordhan — almost literally exuding a shimmering confidence in himself and in his team — said: "Yes, I am concerned by the shape of revenue collection.

Gordhan told the National Assembly that government — Sars — will collect R30 billion less than projected last year, calling it "the largest under-performance since the 2009 recession".

The minister of finance has been frustrated by Moyane's low-level insurgency against National Treasury ever since Gordhan's return to that position. Sars has been hit by the exodus of some of its best and brightest over the last 18 months, while Gordhan told Parliament he can't vouch for information Sars provides it "because of a lack of accountability and cooperation" from Sars' leadership.

The minister was acutely aware that the gathered media hordes on Wednesday noticed that beside him in the front of the room was his deputy, Treasury's director-general and the governor of the Reserve Bank —but no sign of Moyane, the leader of a vitally important cog in the so-called "finance family".

But, he said, "the 13,000 staff at Sars are excellent public servants who remain committed to the targets we set. Myself and Deputy Minister [Mcebisi] Jonas have now started a new round of engagements with the leadership at Sars and have met four times in the last four weeks. We have done so in the national interest."

In answering questions about the new tax proposals — which creates a new bracket at the top-end — Gordhan again lauded Sars' employees, explaining what a vital role they fulfill in the redistribution of wealth from the haves to the have nots.

In his budget speech Gordhan fired a shot across Moyane's bow, saying Treasury "will continue to call upon" Judge Dennis Davis and the Davis Tax Committee (an advisory body appointed by the minister) to advise Treasury "on how best to ensure that Sars remains a robust and effective tax collection agency".

Gordhan earlier expanded the role of the Davis Tax Committee from its focus on tax policy to include governance and accountability as well as its operational model. Moyane has, since he was appointed by President Jacob Zuma in September 2014, dismantled a number of specialist enforcement units in Sars, including the high-risk investigations unit, which fell prey to a disinformation campaign and became known as the "rogue unit".

There is serious concern within Treasury about Sars' ability to collect tax as effectively as in the past as well as the impact the ongoing strife between Treasury and Sars will have on tax morality — people's willingness to pay tax. During his mini-budget in October Gordhan said the taxman will fall some R28 billion short. This deficit will now increase for the coming year.

Gordhan told MPs "an efficient and trusted tax administration" is one of the country's institutional strengths and has played an integral role "in building the democratic state".

This of course has mostly happened under his watch as commissioner and lately as minister of finance. Officials close to Gordhan say he is "resolutely committed" to the contract between the taxpayer and the state. Moyane is proving to be a problem.