Africa-Press – South-Africa. Over a month after Treasury banned consultancy Bain & Co. from public sector contracts for engaging in “corrupt and fraudulent practices” during its work at SA Revenue Service (SARS), President Cyril Ramaphosa has praised the tax agency for trying to rebuild its once highly praised stature.
At an event on Friday marking the 25th anniversary of the creation of SARS, Ramaphosa said the agency used to be an “exemplar of what we can achieve as South Africans”.
“SARS was … recognised as being the best tax institution in the world.”
However, none of this prepared SARS enough to protect itself against “well-orchestrated capture by self-serving individuals who were not only unbothered by the higher purpose [of SARS] … but were in fact hostile to it”.
“What we learnt didn’t teach us and arm us with a way for us to protect our SARS when it was under attack,” Ramaphosa said.
“This wonderful institution that had been built over the years, had started going down, and we therefore needed to have a closer look at what was happening. We saw an unfortunate decline in revenue performance in the years 2014 to 2018.
“It became clear to us that this important institution of our democracy had been repurposed to serve the interest of corrupt and politically connected people.”
Ramaphosa said this led to his institution of a commission of inquiry headed by retired Judge Robert Nugent to investigate how SARS “deteriorated from a world-class institution to one in which taxpayers and the public no longer had any trust”.
“The most damning finding of the Nugent Commission was that there was a massive failure of governance and integrity here SARS, facilitated by the deliberate dismantling of tried and tested organisational arrangements,” the president said.
Ramaphosa said that he, the finance ministry, Treasury and SARS had worked at implementing most of the recommendations of the inquiry.
“Through that process SARS is being rebuilt and is regaining the stature that it used to occupy.
“The few [recommendations] that are outstanding will continue to receive the attention of my administration and the relevant institutions.”
An ‘offensive’ against SARS
The Nugent Commission found that former SARS boss Tom Moyane used Bain as part of a “premeditated offensive” against the tax agency.
“Moyane’s interest was to take control of SARS. Bain’s interest was to make money. This was not a plan for mere succession in public service,” said Nugent.
“Quite clearly, Bain was in search of business, and a ‘profound transformation’ of SARS would do, whatever the existing situation at SARS,” he said.
This week Bain said it had written to National Treasury, SARS and the minister of finance to ask that the ban be overturned.
“There is no evidence that Bain SA engaged in any ‘corrupt and fraudulent’ practices,” Bain said on Thursday, adding that the ban is “fundamentally flawed”.
The Judicial Commission of Inquiry into State Capture found that Bain colluded with Moyane and former president Jacob Zuma to “capture” SARS in a bid to weaken it.
Zondo recommended that authorities investigate all Bain’s contracts with South African departments for potential wrongdoing.
While Bain has acknowledged “significant errors in the procurement and execution of our work at SARS”, it has consistently denied “wilfully or knowingly” supporting state capture.
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