- Taxpayers paid R204 million for a restructuring model that crippled SARS
- SARS went from being highly effective to barely being able to collect tax
- The disaster at SARS led to the recent 15% VAT
Tom Moyane was supposed to restructure the South African Revenue Service's operating model but it only led to crippling the institution.
R204 million taxpayer money was spent on this restructuring. Consultancy firm Bain and Co. was hired and paid this massive amount to come up with a new operating model.
The firm came up with 4 models that only changed the existing model slightly. However, the plans were rejected and a model that discarded most of what was working was accepted.
SARS went from what was an effective way of operating to barely being able to monitor if taxpayers were complying to the tax laws or effectively collecting tax. This led to the 15% VAT hike.
How did this happen?
According to The Daily Maverick, all fingers point to Jonas Makwakwa. He was the head of the committee that was supposed to restructure SARS and worked with Bain and Co.
The model that was approved by Makwakwa gave him incredible power. He had the last say in all tax matters except customs tax and excise tax.
Makwakwa also had say in the VIP unit that serviced high net worth people, ministers, judges and the president and the Large Business Centre.
Furthermore, Makwakwa chose to ignore warnings about the compliance function that seemed to have disappeared from the SARS program.
Briefly.co.za gathered that Makwakwa earned excessive amounts of mysterious money that he couldn't and wouldn't explain when he was busted. He lived above his means and spent about 3 times more than his actual income.
The Commission of Inquiry that is looking into this matter must give president Cyril Ramaphosa a preliminary report by next month and a final report by November.
The SARS Inquiry is currently underway:
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