Bain, Zuma and Moyane agreed to occupy and restructure Sars

Part 1, Volume 3, Chapter 3 of the Zondo State Capture Report deals with the South African Tax Service (Sars).

The Zondo Commission found that Bain was in collusion with former President Jacob Zuma and devised a “planned and coordinated plan to take over and restructure Sars,” long before Tom Moyane was catapulted as commissioner for Sars.

Findings of the Nugent Commission and the Zondo Commission

Nugent’s commission was formed to investigate irregularities in Sars, while the Zondo commission was formed to investigate the capture of the state in public entities.

Nevertheless, the findings of the Nugent Commission are consistent with the evidence of the Zondo Commission:

  • The massive “failure of integrity and governance in Sars”.
  • Moyane ruthlessly mismanaged Sars while “breaking the controls one by one”. Moyane took “control of Sars as if it were his own.”
  • Senior management was “expelled or marginalized in Sars” and replaced by officials who adhered to rules that “neglected their oversight function”. Furthermore, “the capacity to investigate corruption is disabled.”
  • Instead of cultivating a culture of healthy disagreement, Moyane has created a culture of fear and intimidation.

Nugent loosens the last shackles
Saica will investigate all members involved in capturing the state

The Zondo Commission further found that:

  • The private sector has been in collusion with the (state) executive, including President Zuma, to capture Sars and “make him ineffective”.
  • Sars’ investigative and executive capacity was the target of those involved in capturing the state.
  • The media perpetuated “false stories that discredited the target people, as well as giving grounds for their removal, was a significant feature” of the evidence before the commission.
  • Zuma promised Moyane the post of commissioner (Sars).
  • Bain met with Zuma and Moyane before Sars appointed them as consultants and began detailed planning.
  • Certain individuals in Sars were identified before Moyane was appointed.
  • Moyane dismantled the entire executive committee (Sarsa) on the basis of an alleged illegal (outlaw) unit.
  • Zuma and Moyane played key roles in capturing and smashing Sars. Key tax compliance units have been disbanded or restructured, and projects have been put on hold or abandoned. The revenue collection function is fundamentally weakened.
  • Bain was appointed in January 2015 to provide consulting services through an irregular closed tender process, after which “Bain just continued to work at Sars.”

Bain’s role in dismantling Sars
Bain’s rule is disappearing
Robbery of Eskom, Transnet and SAA by the media company Gupta

Witnesses who testified about Sars in the Zondo Commission are:

Athol Williams – former employee / independent consultant at Bain. He oversaw the investigation commissioned by Bain in connection with his contract with Sars. He resigned due to Bain’s non-transparency towards him and the authorities.

According to Williams, Bain’s strategy consisted of targeting the organization, exercising control, and striving for “financial enrichment through corrupt procurement and other means.”

The commission thanked Williams for the evidence presented regarding Bane, Moyane and Zuma regarding the plans to capture Sars. Williams rejected Bain’s attempts to buy his silence.

Symington Train – a senior Sarsa official and a victim in a hostage incident at the Tax Administration, which the commission described as “an extreme example of the culture of fear and harassment that marked [Mr] Moyane’s mandate. ”

Symington told the commission that “ministers [Pravin] Gordhan was reportedly seen as an obstacle to the parties involved in capturing the state. ”

Read: Breaking down professionals who enable financial crime

Johann van Loggerenberg – A former Sars employee told the commission that there are special units in Sars that have a mandate to help law enforcement agencies control organized crime, from the perspective of revenues and customs and excise duties.

Tom Moyane – former commissioner for Sars who testified in the commission under the invitation. The commission received evidence that Moyane had been presented with the ‘Plan of the First 100 Days’ months before joining Sars.

The plan proposed “identifying individuals for neutralization.” Moyane said the use of the word “neutralize” was unfortunate.

Symington told the commission that Bain’s plan for Sars “was presented to Sars leaders as done”. Moyane disagreed and told the commission that he ran a “consultative organization in which everything was put before the discussion and approval”. He said he had never taken a “dictatorial position”.

Minister of Justice Gordhan – who told the commission that, when the Ministry of Finance announced the competition for the commissioner in 2013, more than 120 applications were received.

The commission noted that Gordhan noticed this first hand [Mr] Moyane refused to answer to him because the line minister, instead leading Sars as he wished, refused to reveal and discuss the changes he had made in Sars, refused to discuss his new operational model and singled out some of the top people from institutions as and Sars compliance capacity ”.

The commission considered Gordhan’s testimony to be “important evidence of the institution’s commitment”.

Read: Moyane’s review of Sars was related to Gupta-Gordhan

Moyane’s boasting

The Commission noted that:

  • Moyane’s time was “characterized by the cleansing of the relevant officials in Sars.”
  • Many key officials resigned within weeks of Moyane’s arrival, including Barry Hore, Sars’s chief operating officer, to whom 70% of staff corresponded. Horea was replaced by Jonas Makwakwa – “the same person who allegedly fed Bain sensitive, confidential information with which he could create his detailed plans for [Mr] Moyane ”.
  • Within two weeks of arriving in Sars, Moyane had dissolved the entire Sars executive committee on “the basis of the Sunday Times’ apparent revelation about the so-called Rogue unit.”
  • The Project and Evidence Management and Technical Support Department, headed by Van Loggerenberg, “disbanded and completed its projects” under Moyane.
  • During Moyane’s rule, “there was a 15% drop in tobacco excise taxes. In addition, the illicit component of the industry has grown to 30%.

The Sars narrative of a ‘renegade unit’ sent to the trash
The propaganda insult of the ‘renegade unit’ finally put to bed

Zondo Commission recommendations

The Commission recommended that:

  • Bain’s contracts with state departments and state bodies should be reviewed for compliance with relevant legal and constitutional provisions.
  • The state prosecutor’s office will decide whether to initiate criminal proceedings in connection with the award of the contract for Bain.
  • The Sars Law needs to be amended to allow for an open, transparent and competitive process for the appointment of the SRS Commissioner.
  • Moyanea is charged with perjury in connection with his false evidence to Parliament.

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