As Sars bled and good people left, bonuses rocketed
Bonuses rose 41% in one year while top managers appeared oblivious to what was happening at the tax agency
While revenue collection was on a steady decline, staff at the SA Revenue Service received unprecedented bonuses after Tom Moyane took over the reins.
According to a presentation by national Treasury – discussed at the judicial commission of inquiry on tax administration and governance issues at Sars on Wednesday – the year-on-year growth of bonuses at the revenue collector increased by 41% in the 2014/15 financial year.
This came after now-suspended commissioner Tom Moyane was appointed by then president Jacob Zuma.
Increases of such magnitude have not been seen in recent years. In the 2012/13 financial year, for example, there was a 6% increase in bonuses.
This is at a time when, according to the same presentation, tax revenue collections underperformed against forecasts made the year before. The trend of underperformance was also noted in the presentation.After massive shortfalls in revenue collection during the 2009/2010 economic recession, Sars turned things around, generating R26bn more in revenue than was forecast. In 2014, the surplus was R2bn.
However, shortfalls in collection compared with targets became a trend in 2015 and thereafter. There was a R7bn shortfall in 2015; R11bn in 2016; R30bn in 2017; and R49bn in 2018.
Treasury officials at the inquiry said there had been a “slow bleed” of senior managers at Sars in recent years, while its top leadership remained unaware of the issues that plagued the institution.
Treasury deputy director-general Ismail Momoniat said that under Moyane’s new operating model there was a sense that its executive committee was “unaware of the issues”.
“We began to see a high turnover of senior managers. It began slowly, a slow bleed. Let’s take the loss of staff from key units like the Large Business Centre and customs. You got a sense that the leadership at Sars, the commissioner and some of the executive managers, were unaware of the effect that some of these changes had on the ground,” Momoniat said.
“When you talk to the Sars leadership, it’s almost like they deny the problem. You got a sense that the executive committee was really a body unaware of the issues. Members may have whispered to us about how bad things were but nobody was willing to come out openly and tell just how things were falling apart.”
The inquiry continues on Thursday.