South Africa Tax Agency ‘Dismantled’ by Ex-Boss, Report Says

(Bloomberg) -- Governance at South Africa’s tax-collection agency was “dismantled” under former Commissioner Tom Moyane, a inquiry into management at the institution found.

Senior managers were driven out or marginalized and those appointed by Moyane to replace them were compliant to his demands, according to the final report of the Nugent Commission of Inquiry into the South African Revenue Service released on Friday.

Cyril Ramaphosa suspended Moyane in March, soon after replacing Jacob Zuma as president with a pledge to end graft in the government and state companies. Moyane, who was fired last month on the recommendation of the commission, was closely allied to Zuma, whose almost nine-year tenure was marred by scandal. The agency repeatedly missed revenue-collection targets after Moyane took over in 2014.

Moyane “arrived without integrity and then dismantled the elements of governance one by one,” the panel, led by retired Judge Robert Nugent, said in its 200-page report. “This was more than mere mismanagement. It was seizing control of SARS as if it was his to have.”

Moyane has denied wrongdoing and is contesting his removal and allegations against him in court. His lawyer said the commission overstepped its mandate, according to News24.

Bain Probe

Ramaphosa’s office said the president was studying the report and recommendations, which include possible prosecution in the awarding of contracts with Bain & Co. The local unit of the Boston-based consultancy company was hired by Moyane to assist in restructuring the tax agency.

Bain removed the head of its South African business in September and started an independent probe into its work for SARS. It will also repay money earned from its contract, the company said.

Opposition parties and former SARS employees have accused Moyane of deliberately weakening the tax agency to protect senior politicians who failed to declare all their income -- claims he denies.

Finance Minister Tito Mboweni on Friday reappointed Mark Kingon as acting tax commissioner for a further 90 days. The government is now expected to seek applicants for the permanent position.

To contact the reporter on this story: Jacqueline Mackenzie in Johannesburg at jmackenzie9@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net, Gordon Bell, Rene Vollgraaff

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