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New SARS boss: ‘I hope to reignite that flame of hope from the flicker of despair’

Monday, 01 April 2019   (0 Comments)
Posted by: Author: Ruan Jooste
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Author: Ruan Jooste (Daily Maverick)

Edward Kieswetter will walk into a demoralised SARS when he begins work on May 1. In an interview, he says his three priorities will be getting staff back on board, winning back the hearts of the South African people and presenting a turnaround plan for the beleaguered revenue service.

New South African Revenue Service (SARS) commissioner Edward Kieswetter has his work cut out for him. He is re-entering an organisation that has rotted beyond recognition from when he left it nine years ago to enter the private sector.

When he was previously involved with the revenue collector, first as chief operating officer and, later, deputy commissioner, the leadership team under the stewardship of Pravin Gordhan launched a hugely successful modernisation programme, that included the game-changing e-filing platform and established the large business centre (LBC). Before it was dismantled this was responsible for the collection of more than 30% of total tax income. Consequently, in 2007 the taxman logged the first budgeted surplus in recorded history. “We collected more money than the country needed that year,” Kieswetter says.

What he is walking into today, as The Nugent Commission of Inquiry into Tax Administration and Governance by SARS distinctly states, is the aftermath of a “massive breakdown in governance and integrity”, “an abuse of authority to serve a corrupt and narrow interest” and an enterprise “rendered dysfunctional deliberately, thus preventing it from executing its mandate”.

Kieswetter references the closure of a tried and tested business model, which was the LBC, as well as the integrity and compliance units.

“These establishments were based on the international best practice of fellow offshore tax authorities,” he says. “All of that was disabled. Combined with the erosion of confidence and morale and, in some circumstances the isolation of senior management, with of many of them leaving, you can understand why there has been a decrease in tax morality, a decline in tax compliance and, as a consequence, a reduction in revenue collection.” The tax agency faced, among other issues, a R50-billion revenue shortfall in its 2017 budget.

It is for this reason Kieswetter has mixed feelings about his appointment as the new SARS boss. He says, on the one hand, he is saddened by the extent to which the organisation had eroded under the watch of former SARS boss Tom Moyane but, on the other hand, considers it an honour to respond to the president’s call to restore the country’s tax office to its former glory.

A year after Moyane’s suspension, Kieswetter was selected to the position last week by president Cyril Ramaphosa from a group of six shortlisted candidates, including the current acting commissioner Mark Kingon.

“I did put up my hand and say send me!” he says. “I love this country. We fought for it in various forms for many years, so you and I can both have a country we respect and be proud of and live in a well-functioning democracy. But without a well-functioning revenue service, there can be no democracy, because the legitimate expectations of 55 million South Africans cannot be met,” he says.

Sadly, he adds, SARS was caught up in the state capture project, which has cost our country billions and billions.

“We’ve not only lost out on the application of funds, which enriched only a few dishonest people, but we also under-collected. Money that didn’t find its way to building schools, eradicating pit latrine toilets or erecting other infrastructure so desperately needed is lost forever.”

Says Kieswetter: “To then be asked: Edward, please, we think you are the man to whom this task should fall to is humbling. I don’t consider myself a saviour of any sort or think they are lucky to have me. I accept my new role with an inordinate sense of privilege. I’m being granted the opportunity to restore SARS back to its former position of respect as an admired and trusted organisation. I will treat this responsibility with the seriousness it demands.”

He links this to his envisioned leadership style – and the failure of his predecessor – and refers to one of his recent posts on Twitter where he stated that “leaders need to take the work seriously, and not themselves”.

“Many leaders do that,” he says. “They disconnect from the higher purpose in the work they do. It becomes about self-entitlement and self-gratification and the job is approached with an element of arrogance.”

“Rather take it on with some humility,” he adds, “and admit that you cannot do it on your own.” With this top of mind, Kieswetter says his first priority will be to restore relationships and partnerships with all people within the tax eco-system. He says turning a sinking ship around starts and ends with the people on board.

“I’m going to re-engage the people. The same people who have become understandably disillusioned and disheartened by the organisation’s past shenanigans. They have lost a sense of pride in the organisation and trust in its leadership. For me everything begins and ends with people,” he says.

Top of his to-do list when he officially clocks in on 1 May is to assemble a stellar executive team and re-establish connections with the 12,500 employees of the organisation. He says the looming worker strike is a clear indication that conversations need to be had, and quickly.

“There are still many of them who wake up in the morning and go to work with a single sense of purpose, which is to serve,” he says. “They need to be reminded that we appreciate that,” he says, again referring to another of his recent tweets: “Great leaders don’t inspire by telling them about their great works but inspire people by helping them believe that they are capable of great work.”

“I hope to reignite that flame of hope from the flicker of despair,” he adds. “When I address our staff, they will be able to detect the genuine interest I have in them. The people of SARS are at the core of my priorities as commissioner.”

Kieswetter says he has already set up meetings with the current executive and plans to start visiting SARS offices before he officially takes over the reins.

Kieswetter’s former associates say that his people skills are one of the greatest attributes he is bringing to the table.

Executive Secretary at African Tax Administration Forum (ATAF), Logan Wort, who served with Kieswetter on the SARS Exco between 2006-2009, says he is very excited about the appointment.

“His ability to conceptualise and lead strategy and drive decisions will be vital to bring SARS back to a top state institution. If we are serious in rebuilding the organisation, and we look at the list of candidates, the president could not have made a better choice,” he says.

Wort says Kieswetter has great experience in building a multi-talented team and his memory and experience within the organisation will assist in getting the house back in order. “He is also technically sound,” Wort adds.

Originally qualifying as an electrical engineer from the Cape Peninsula University of Technology, Kieswetter also holds a postgraduate diploma in education and completed three masters degrees with the North West University, Henley Business School and University of the Western Cape – one being in taxation.

Wort says Kieswetter is taxpayer centric and understands the needs of stakeholders, business and the civil service. He says that “Edward’s basic understanding of politicians is not necessarily his strong suit, and that is a good thing. He has not connected to any political party and his history shows that he is autonomous in this regard.”

“He is own person. His ability to make decisions is based on engaging with people, and not for the sake of pleasing them. He does what is right. That is how I know him,” Wort adds.

Wort says that relationships with international tax organisations like ATAF deteriorated during Monyane’s rein and agrees with Kieswetter’s view that these fences need to be mended and with great haste, to allow for better cross-border cooperation and enforcement of tax policy, and in turn tax collection.

Keith Engel, CEO of the SA Institute of Tax Professionals (SAIT) and former tax policymaker at National Treasury, who worked with Kieswetter closely during his previous tenure at SARS, agrees that his heart is in the right place, referring to Kieswetter’s opening statement that he “is there to help”.

Engel says the 60-year-old Kieswetter came out of semi-retirement to take up the role. “So, he is not in it for the money,” he says. “He wants to make a difference.”

“He also has great experience in both the public and private sector,” Engel says, “which will better bridge the divide between business and the state when it comes to issues of tax.”

Engel says the same goes for relations between policymakers and the tax collector itself, something Kieswetter also concedes is a relationship that needs mending.

“SARS became very closed off and fearful of contamination from outsiders,” says Engel. “I’m convinced Edward will re-open the channels of dialogue.”

Both Wort and Engel concur that Kieswetter is a people’s person and that that skill is part of the new commissioner’s charm. An array of social media posts supports that notion. But Kieswetter doesn’t consider it a strength or an attribute as such. “It is just who I am,” he says.

It is how he was raised. He talks of the two most profound life lessons he learnt from his parents.

“My dad, who passed away a year ago, was a slave driver. He taught me the ethics of hard work. From my mom, I learnt the simple but profound lesson that I’m here to be a blessing, to have a purpose in life.”

Kieswetter doesn’t believe in a work/life balance as that implies that they are two separate things. “My work is an extension of who I am,” he says.

“My job is integral to me as a person and what I try to achieve in life. If I cannot win the hearts of the people no intellect or cleverness or experience will have a meaningful impact,” he adds.

And winning back the hearts of the South African people will be no easy task, which Kieswetter concedes to. The finance ministry has recognised that the decline in tax morality may be contributing to the tax revenue shortfall. The Minister of Finance Tito Mboweni announced in the budget speech that revenue collection for 2018-2019 is expected to be R15.4-billion less than what was estimated in the medium-term budget policy statement in October. The projected shortfall of R27.8-billion has now been revised to R42.8-billion.

Reaching out to the people is how Kieswetter plans to restore tax morality. As mentioned, the first step is to look internally – getting employees and the executive back on board and reaching out to related local and international parties. Second, Kieswetter says, is to win back public trust and confidence.

“We need to raise the issue of tax morality and why it is important to contribute,” he says. “But it is not about just conveying the message, we also need to listen to what taxpayers have to say,” he states, alluding to “reach out and listen campaign”. He says it is important that SARS should be respected and trusted and not just feared.

He adds that his third immediate priority following his formal appointment is to address the public with a formal turnaround plan of action. He also says that he will resign from all his current executive appointments to focus on the task at hand. Kieswetter is a non-executive director on several boards, including Shoprite, Transnet and GEMS Education Africa.

Kieswetter’s list of medium and longer-term priorities goes on, dealing with both the softer and harder issues. But in the interim industry players and the South African people seem to agree, that we are off to a good start. 

This article first appeared on dailymaverick.co.za.


 

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