OPINION

Judge Robert Nugent to head SARS inquiry – The Presidency

Commission will examine tax administration and governance at revenue service

President Ramaphosa establishes Commission of Inquiry into tax administration and governance

23 May 2018

President Cyril Ramaphosa has today (23 May 2018) appointed a commission of inquiry into tax administration and governance in the South African Revenue Service (SARS).

This follows President Ramaphosa’s announcement in the 2018 State of the Nation Address that he will take steps to stabilise SARS, restore the credibility of SARS and strengthen its capacity to meet revenue targets.

The Commission will be chaired by retired Justice Robert Nugent, with assistance from Prof Michael Katz, Adv Mabongi Masilo and Mr Vuyo Kahla. Given the critical role played by SARS and the urgency to ensure that it meets all its revenue targets as announced in the Budget, it is envisaged that the Commission delivers an interim report as soon as possible and no later than 30 September 2018 and a final report by 30 November 2018.

The terms of reference for the Commission covers the following themes:

The adequacy and legality of steps that SARS took to address revenue shortfalls in the last two years, including allegations of unauthorised payment of bonuses to top executives and withholding of refunds owed to ordinary tax payers.

The performance of tax administrative duties and application of discretionary powers required or enabled by existing tax legislation.

The adherence to tax administrative processes, and whether deviations from the established processes unfairly benefited politically-connected persons and persons connected to top managers of SARS.

The adherence to customs and excise provisions, with particular reference to tobacco products.

The adherence to internal personnel policies and HR practice, in light of the exit of senior personnel and alleged coercion of SARS officials to resign.

The impact of the conduct of SARS management on the public image of SARS, upholding the basic values and principles governing public administration envisaged in section 195 of the Constitution.

The impact of any change in the operating model of SARS on the effectiveness of SARS operations.

The integrity of supply-chain management and tendering processes.

This inquiry is separate from the disciplinary process instituted against SARS Commissioner Tom Moyane. The inquiry is also separate from the Davis Tax Committee appointed by the Minister of Finance, which focuses on assessing or recommending specific tax policy issues.

According to President Ramaphosa: “The Commission will need to establish the veracity of reports in the public domain on administrative and leadership challenges at SARS that potentially undermine taxpayer morality”.

Both the Minister of Finance and I are keenly aware of the need to demonstrate to the people of South Africa that the tax revenue collected from their hard-earned income is being used wisely, productively and for its intended purpose. We remain accountable to the people of this country.

I want to end by thanking the many South Africans who, despite all our challenges, ensure that they pay their taxes, as part of their responsibility as citizens and residents of our country, and who continue to do so,” he said.

Issued by Khusela Diko, Spokesperson, The Presidency, 23 May 2018