NEWS
20/03/2018 04:52 SAST | Updated 20/03/2018 09:10 SAST

Here’s Why Ramaphosa Acted To Suspend Moyane Last Night

Mark Kingon will be acting SARS commissioner, but who will ultimately take over?

Former SARS commissioner Tom Moyane.
Gallo Images / The Times / Esa Alexander
Former SARS commissioner Tom Moyane.

On Monday night, President Cyril Ramaphosa suspended the SA Revenue Services (SARS) commissioner Tom Moyane who spent a tumultuous three-and-a-half years at the helm.

Former deputy finance minister Mcebisi Jonas has been approached to take the job and Ivan Pillay, the axed former deputy commissioner, is primed for a return to his old job, according to reports.

Jonas was offered the job of finance minister in Ramaphosa's new Cabinet but turned it down, so it is not clear if he will take the SARS job.

In the meantime, Mark Kingon will act as SARS commissioner.

Bloomberg via Getty Images
Mcebisi Jonas.

Business Day reported yesterday that Moyane had refused a request from Ramaphosa for his resignation. Hours later, Ramaphosa struck and his spokesperson Khusela Diko said the president was acting to protect public finances.

In the February budget, SARS under-collected by R47-billion against target. Moyane reportedly wanted a stay of execution until the end of the financial year to show that he could make good on revised targets. But, in addition to a lower tax take, South Africans are becoming less compliant about paying tax according to reports from SARS itself.

In March last year, the tax ombudsman Judge Bernard Ngoepe requested permission from then-finance minister Pravin Gordhan to investigate declining service levels at SARS.

SARS has progressively weakened since Moyane took over. By April last year, 39 senior managers had quit SARS and had been replaced by 21 new managers, none of whom had tax experience. Morale at SARS is low and infighting is endemic, according to staff. This has had an impact on collection. Moyane says revenues are lower because the economy is in a low growth phase.

In addition, Moyane returned tax executive Jonas Makwakwa to the second most senior role at SARS in December 2017 even though he faced an investigation by the Hawks for money-laundering and had been suspended after footage emerged of he and girlfriend (and fellow SARS employee) Kelly-Ann Elskie moving from ATM to ATM putting huge amounts of cash into their accounts. He had also been fingered in a Financial Intelligence Centre (FIC) report for having untraceable cash in his bank accounts.

Moyane was not on the list of 104 candidates who applied for the job of SARS commissioner when incumbent Oupa Magashule quit. Instead, he was personally deployed into the position by President Jacob Zuma who was under pressure from the previous SARS leadership for his unpaid taxes.

Since he took over, SARS investigative capacity has been neutered and a number of high-profile investigations into organised crime have come to a dead halt, often because syndicates have high-profile political contacts. These have included investigations into illegal tobacco smuggling and the gangland protection industry in Cape Town, among others. Moyane is believed to have protected these interests to the detriment of the fiscus.

In May 2015, Moyane laid charges against former Finance Minister Pravin Gordhan for his alleged role in starting what became known as the rogue spy unit and for allegedly illegal pension payout to Pillay. This led to an investigation by the Hawks and an announcement by the national director of public prosecutions (NDPP) Shaun Abrahams that Gordhan would be charged with fraud. Abrahams quickly changed his mind after a massive public outcry and when evidence emerged that the pension payout was legal.

By refusing to resign, it's clear that Moyane is going to put up a fight, but his term was up for renewal in September anyway.