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[OPINION] The role of Sars in Ramaphosa’s ‘new dawn’

When Cyril Ramaphosa suspended Sars Commissioner Tom Moyane, the letter was a terse one. In it Ramaphosa referred to the conversation with Moyane a day earlier. The words are probably worth repeating here.

“Developments at the SARS under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen. As I indicated in my State of the Nation Address on 16 February this year, SARS is a vital institution in South Africa, and "tax morality is dependent on an implicit contract between taxpayers and government that state spending provides value for money and is free from corruption". It is in the public interest to restore the credibility of the SARS without delay.”

The letter becomes rather more withering as it proceeds to detail the lack of confidence the president has in Moyane’s leadership. It says,

“As I made plain to you, I have lost confidence in your ability to lead SARS. Your position is not one of any ordinary employee. Your obligation to be responsible for the performance of SARS and its functions impacts on the public purse and therefore the wellbeing of the nation as a whole. This is an exceptional circumstance that requires urgent and immediate action.”

Mark Kingon was then immediately made acting Sars commissioner. One wonders of course whether former Deputy Finance Minister Mcebisi Jonas might not be brought in to revive the flagging Sars? Moyane has said he will, in the way of all Zumarites, fight his suspension in court.

That is his right and he should pursue it if he so wishes.

In the meantime, however, the very serious business of fixing Sars must begin. Pravin Gordhan had built Sars into a world-class institution and Moyane wrecked it through his protection of Jonas Makwakwa and his breaches of the Financial Intelligence Centre Act in that regard. His alleged relationship with the Guptas, as well as VAT payments made to them, also raised eyebrows. Kingon has launched an investigation into the matter.

It was therefore a relief to see Minister of Finance Nhlanhla Nene, his deputy Mondli Gungubele and Kingon present a united front this week when Nene himself fronted up at the announcement of the preliminary revenue collection results for 2017/2018. Gone was Moyane’s sleight of hand and his blustering claims of maximising revenue collection.

Nene was upfront, transparent and accountable. But what else can we expect from a man of such impeccable integrity? As expected, tax revenue has fallen short of its target and is at R1.216 trillion. The reasons for this are multiple, but certainly the poor economic conditions as well as under-collection are contributing factors. But interestingly, the return in confidence after Zuma’s departure also meant an increase in revenue, particularly from companies. Nene expressed concern about tax morality. For a revenue collector to be successful, it has to have the confidence of its citizens - something Gordhan worked very hard to cement when he was commissioner. This means that the benefits of citizenship also mean we all need to pay our fair share of taxes. Of course, the years of corruption and state capture have seriously eroded the nascent tax morality in South Africa. Once that goes, it becomes hard to retrieve. Kingon assured Nene that Sars would not let him down.

What Kingon and Nene have to deal with is also morale at Sars and then the atrophy which has set in, alongside the loss of people of skill and integrity. The rebuilding of Sars will be crucial to Ramaphosa’s ‘new dawn’. Without revenue, it becomes pretty hard to implement socio-economic projects and other key economic interventions.

Getting citizens back on board and ensuring them that after almost a decade of state profligacy, their money will be spent well, will be an uphill battle. There are deep pockets of scepticism within our country, while others remain cautiously optimistic. Ramaphosa himself continues his uphill battle to fix the ANC and to fix the state. It will be a while yet before all the proverbial ducks are in a row.

And yet, seeing Nene at the helm of Finance already makes a substantial difference because leadership of integrity matters. Nene did not seek to massage the truth or figures this week. He told us directly what the issues were. Somehow there is comfort in that - that our Finance Minister does not bring with him scandal and dysfunction, but instead has a deep understanding of the fiscus and is completely committed to the economic well-being of South Africa.

Things may not be perfect but there is, in this trio of Nene, Gungubele and Kingon, the will to fix what has been so tragically broken.

Judith February is based at the Institute for Security Studies. Follow her on Twitter: @judith_february

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