How Tom Moyane turned crack investigators into paper pushers
For six months, once an executive in the customs unit, Sydwell Phokane would 'go to the office and do nothing', Nugent inquiry hears
Tom Moyane’s controversial remodelling of the South African Revenue Service is said to have fragmented various investigative units dealing with high-profile cases of tax evasion, money laundering and illicit trading.
As a result, cases involving poachers, drug lords and gang bosses were left up in the air while senior investigators and managers were shuffled off to paper-pushing positions.
This according to a group of employees who provided a scathing report on the effects of the now suspended commissioner’s new operating model, to Judge Robert Nugent and his commission of inquiry into tax administration and governance issues at Sars.
Moyane’s restructuring is said to have put a stop to end-to-end investigations of complex cases, decentralising specialised units.
This also had an effect on customs and excise units within the organisation.Keith Hendrickse, who previously served as a senior manager for national projects, described how his unit was shut down without consultation.
He described a “town hall”-type meeting where Moyane, his right-hand man Jonas Makwakwa and other officials from the national office presented an organogram which excluded his division.
After the Cape Town office where he worked was shut down, he remained dormant for a few months before being appointed as a senior specialist, said Hendrickse.
He recalled how two cases, one involving an abalone poacher and the other a “criminal boss” who owed Sars about R400m, were left unresolved.
Nugent, who is heading the commission, asked Hendrickse what Sars’ current investigative capacity is in the Western Cape. “There’s nothing. There’s no one there,” he replied.Pieter Engelbrecht, who once headed centralised projects at Sars, shared a similar sentiment.
“One of the key things was that our main job was to affect impact in the illicit economy area. We had set targets which we needed to comply with. Each case would have specific milestones which we needed to achieve ... I believe the unit was successful,” he said, responding to questions about the state of Sars before Moyane’s new model.
“It became very fragmented (after the model was rolled out) ... There is no capability in terms of dealing with the illicit economy.”
Engelbrecht now serves as a senior specialist in Sars’ legal counsel division where he “does litigation work”.
Dion Nannoolal, a senior manager responsible for high-value audit debt collection, said Moyane’s new model broke Sars into silos.
“It has created a level of silos ... I realised, yes, the operations model created this level of silos but at the same time you need to have the right leadership; leadership that is strategically capable of running the organisation and leadership that is supportive. If these two things don’t work, it has an impact on compliance in South Africa,” he said.
It was not only Sars’ investigative capability that took a knock: customs suffered, too.
Sydwell Phokane, once an executive in the customs unit, now spends his days as a domain officer, a position whose roles and responsibilities nobody has been able to explain.
From February to July 2016 he would go “to the office and do nothing”.
“Post implementations of the operating model, mainly looking at revenue performance, the customs performance on the collection of its revenue really declined. When you contrast it to before then, the customs performance on revenue was at all times above target,” he said.
The inquiry will continue until the end of the week with more testimonies expected from senior staff.