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SARS restructuring costs laid bare at inquiry

Tom Moyane

The restructuring of the operating model at the South African Revenue Service (SARS) not only resulted in duplications and inefficiencies but also led to the government losing hundreds of millions of rand.

This was said at the Nugent Commission of Inquiry set up by President Cyril Ramaphosa after he suspended SARS commissioner Tom Moyane.

One of Moyane’s main projects after taking over the reins at SARS was the restructuring of its operating model.

The project conducted by Bain and Co, cost the taxpayer more than R200-million.

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The Nugent Commission heard that instead of improving the operations at SARS, it led to vital units being shut down and functions limited all at a great cost to the country.

“In the past, we could have brought a preservation order on a group of companies maybe four or six signatures,” said SARS senior official Dion Nannoolal.

“Now we need anything between 8-12 signatures. I can assure you we’ve lost hundreds of millions of rands in the past few years.”

Tom Moyane

Witnesses said the new operating model led to a decline in tax compliance across various sectors of the economy, especially in illicit sectors such as tobacco and poaching.

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The commission also heard that units handling sensitive and high-value cases were effectively culled overnight.

SARS officials say the change in the structure resulted in weakened legal capacity, which in turn made it difficult to collect outstanding debts.

Bain is expected to also testify at the commission.

It is hoped the company will be able to explain why the operating model was changed so drastically, and who instructed them.

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Source: News24

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