While chatting with clients and friends following this year’s Budget Speech, the phrase, “at least” was frequent feature: “At least it was Tito Mboweni” or “At least Ramaphosa is President” or “At least, it isn’t so-and-so” (I leave specific names to your imagination!).
Regarding our new SARS Commissioner, though, we tax practitioners and experts are far more positive.
Why so hopeful, you wonder … and rightly so! Following a string of Commissioners, including the questionable Oupa Magashula, and, most recently, the deeply tainted Tom Moyane, we need the restoration of this once globally respected institution, systematically dismantled by corrupt officials.
Take centre stage Edward Kieswetter, new SARS Commissioner.
From the time of his appointment, Kieswetter has been at pains to comply with good governance: he resigned as Shoprite’s Lead Independent Director, and fully disclosed outside interests and involvement in organisations, including directorships on SOEs such as Transnet and Technology Innovation Agency.
President Ramaphosa has said that he has “every confidence” that this new Commissioner has the “experience, integrity and skills” to restore this once fêted institution to its former honour. Between 1997 and 2009, under Pravin Gordhan’s leadership, SARS established itself as one of the foremost revenue services in the world, embracing technology and viewing the taxpayer as valuable customer. It was applauded as efficient, transparent and modern.
Fit for task
In May, Fin24 listed the most urgent matters facing Kieswetter, and these serve to highlight the new Commissioner’s suitability for his new role.
Firstly, SARS needs to increase its revenue collection. For the financial year ended 31 March 2019, SARS had collected R14.6bn less than estimated in the revised Budget – this larger deficit was attributed to an increase in refunds paid out. In contrast to Moyane with no tax experience or financial background, Kieswetter was SARS Deputy Commissioner between 2004 and 2009, during Gordhan’s tenure as Commissioner; it is said that Kieswetter’s unit was responsible for 30% of the SARS revenue generated then. This contributed to the Government surplus that allowed South Africa to weather the 2008 financial crisis better than many countries. Kieswetter has a Master’s degree in Education, an Executive MBA and an MCom degree in Tax.
SARS must cut down on illicit trade in its mandate to increase revenue collection, and has now tendered for a track and trace marker. South Africa has reportedly lost over R6bn in a single year in illicit alcohol trade and loses around R8bn annually to illicit tobacco trade.
In addition, SARS will be following up on errant taxpayers. Kieswetter has already articulated his policy of prosecuting ‘without fear or favour’.
Secondly, cleaning up after state capture will not only require an unwavering commitment to personal integrity, but also mean reviewing procurement processes, re-establishing the Large Business Centre and other units dismantled by Moyane, and evaluating all SARS posts. Moyane suspended or replaced the whole of the SARS top structure in four months, and in less than a year, many of the most experienced and respected executives had left. IT development halted and millions were paid to such companies as Bain & Co.
So, developing future leaders will be part of Kieswetter’s mission, to recreate a thriving and confident organisation. Kieswetter is known for his transformative leadership approach, with a philosophy of a leader as steward, as an opportunity to serve, not to be served.
Next, with Moyane having stopped the drive to modernise systems, Kieswetter must increase innovation. Embattled IT head, Mmamathe Makhekhe-Mokhuane, has been on suspended leave, following her infamous television interview in October last year.
All these tasks are aimed at restoring the institution’s credibility, both locally and abroad. Finance Minister, Tito Mboweni, is looking forward to “seeing SARS re-established as a respected tax collector and improved revenue collection outcomes.” For the sake of the country’s growth and the goodwill of the taxpayer, so do we.