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SARS’ dented image very likely to come back to bite it

Monday, 09 February 2015   (0 Comments)
Posted by: Authors: Banele Ginindsa and Wiseman Khuzwayo
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Authors: Banele Ginindsa and Wiseman Khuzwayo (Business Report)

The reputation of SA Revenue Service (SARS), built painstakingly by previous commissioner Pravin Gordhan, was becoming unhinged as a result of the crisis facing the government agency, tax commentators said yesterday.

Since the appointment of new SARS commissioner Thomas Moyane last year, key personnel have left or been suspended and a probe launched into a unit that allegedly engaged in illicit activity.

David Warneke, a tax director at BDO, said before the series of events, SARS was the best government agency in the eyes of the public in terms of efficiency.

"The agency was seen as the best in government and beyond reproach. Its tax collection was seen as without fear or favour.”

He said tax morality could be a fickle thing, with some saying they were not getting value for money. "Tax morality is in danger of a serious blow and it may go backwards because SARS will be seen as no longer beyond reproach.”

Warneke said even if SARS or government made a public statement about the events, it might not salvage the agency’s image.

"There will be a perception that whatever is said might not be true, it is a conspiracy theory. Perhaps, it all depends on how people come across in a statement that is made.”

Warneke said unfortunately a lot of crisis were coming together to create a situation where the country is being undermined.

He mentioned political behaviour as one of them.

"People are now wanting to get as much of their money out of South Africa. There are many underlying issues but the SARS’ issue does not help.”

PricewaterhouseCoopers said: "While PwC cannot comment on any specific investigation outside of our realm, PwC supports any endeavour to ensure that state institutions responsible for the administration of taxpayers’ money maintain the highest standards of service.”

Keith Engel, the deputy chief executive of the SA Institute of Tax Professionals, said although SARS image might be dented by the revelations, especially that of operating a brothel in Durban, tax collection would not be affected.

"I think it is a lot of noise here. It is more of an emotional thing but, of course, that does not help SARS’ image.”

But the resignation of Johann van Loggerenberg, the head of enforcement and investigations, might be a blow to the agency.

The forensic and investigation unit is trained to find hidden sources of money. I am afraid that strength might not come back,” said Engel.

The offices of the SARS commissioner as well as National Treasury were asked for comment about what measure they were putting in place to stabilise SARS, but had not responded at the time of going to print.

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