'Sars was a world-class efficient, respected tax & customs administration'

Pravin Gordhan has been called as the first witness at the commission of inquiry into tax administration and governance in Sars which started in Pretoria on Tuesday.

FILE: Public Enterprises Minister Pravin Gordhan gives testimony in the commission of inquiry into governance at Sars. Picture: Barry Bateman/EWN

JOHANNESBURG - Former finance minister Pravin Gordhan says by 2014, South African Revenue Service (Sars) had grown into a world-class efficient tax administration.

Gordhan has been called as the first witness at the commission of inquiry into tax administration and governance in Sars which started in Pretoria on Tuesday.

Retired judge Robert Nugent, who has been appointed as the inquiry's commissioner, says the probe is focused on the four-year period between April 2014 until March this year.

Suspended Sars Commissioner Tom Moyane was appointed as the tax boss in September 2014.

Gordhan set the background for the growth of the revenue service, starting with his appointment as commissioner in 1999.

“By 2014, if not earlier, the Sars was a world-class modern, efficient and respected tax and customs administration. South Africans who worked for Sars held their heads high both within South African and indeed globally as well.”

He says Sars became a model for government departments.

“People were proud to say they work for Sars and would probably want Sars to be part of their CVs so they can move on to higher offers, if you like, within the public and private sector as well. It became an example of what transformation would be and what it could achieve.”

SYSTEMS AT SARS

Gordhan says the systems he introduced at Sars helped to develop a compliant tax-paying public and efficient revenue collection administration.

Judge Nugent referred to the minister as the architect of the revenue service system.

Gordhan says one of their goals was to ensure a compliant tax base.

“Dramatically improved enforcement, that’s the key theme because if there’s no risk of you being caught or there's no risk of being prosecuted as is the case now in some instances, then why must you comply with the law? That’s the logical question people would ask.”

The minister says their turnaround strategy transformed revenue collection into an efficient system.

“And that would enable us to achieve better revenue collection, better customer experience, tax fair experience, improve compliance and risk reduction, enhance human capacity, heighten border security, and so forth."

The now minister of public enterprises is also the ex-Sars commissioner.

The inquiry seeks to establish why South Africa has experienced a R50 billion revenue shortfall as well as the cause of the exodus of skilled staff at Sars.

WATCH LIVE: Pravin Gordhan gives testimony at Sars commission