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<p>South Africa&#8217;s Minister of Finance, Enoch Godongwana delivers one of his most challenging budget speeches amid the slowest growth rate in years and a tough election challenge for the ruling party. For post-Budget analysis, CNBC Africa brings you 2024 BUDGET INSIGHTS, unpacking the difficult balancing act required of the minister against increasing global uncertainty and fracturing world alliances.</p>


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South Africa 2024 Post-Budget Insights

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<p>Edward Kieswetter, Commissioner for South African Revenue Service spoke with CNBC Africa&#8217;s Godfrey Mutizwa on expectations and targets for the 2021 tax season.</p>


Edward Kieswetter on expectations for the 2021 tax filing season

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<p>Edward Kieswetter, Commissioner of the South African Revenue Service charged with the job of collecting the country&#8217;s dwindling tax in the teeth of the COVID-19 pandemic. How much are we missing, how much did the ban on alcohol and cigarettes cost the county&#8217;s coffers? What can be done about it? He joins CNBC Africa for more.</p>


Here’s how much tax SA has lost to COVID-19 induced alcohol

Here’s how much tax SA lost due to COVID-19 induced alcohol, tobacco ban

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<p>This week the South African Revenue Service tolled of the full extent of its problems by revealing a shortfall of almost R300 billion leaving the government with less money to spend at a time it’s most needed. And yet the people who pay this dwindling amount of tax are often disputing this every step of the way. How often and how serious are these dispute. Tax Ombud Professor Thabo Legwaila, CEO of the Tax Ombud joins CNBC Africa for more.</p>


Tax Ombud release findings of second systemic investigation against SARS


<p>By Monique Vanek </p>



<p>South Africa is losing more than R100bn ($5.6bn) in tax revenue due to people not paying and fiddling their returns. The tax collecting authority estimates nearly half of South African companies aren&#8217;t paying tax on behalf of their employees and others are avoiding them. This was the word from South African Revenue Service (Sars) Commissioner Edward Kieswetter on Wednesday as he presented the preliminary revenue collection results for 2019/2020.</p>



<p>He said it may even be more than an R100bn and is working with the Davis Tax Committee to find out if there is more. The committee assesses South Africa’s tax policy framework to support inclusive growth and employment.</p>



<p>“Our initial assessment suggests the number is higher,”
Kieswetter surmised. </p>



<p>Kieswetter attributed the loss to three factors:</p>



<ul><li>General non-compliance &#8211; conscious or unconscious. This includes under disclosed taxes and not paying PAYE on time. Only 57% of companies are complying, which is incredibly low, he said.</li><li>Aggressive tax planning, such as transfer pricing abuse, base erosion and profit shifting by large corporates</li><li> Criminal activities, such as VAT fraud. The commissioner noted that there has been a significant increase in fraudulent claims and the creation of fictitious companies for this purpose. He had harsh words for those engaging in this practice stating that they are stealing money from the fiscus. He estimated that Sars suffered a revenue compromise of R8bn-10bn this year of which R6bn stemmed from companies accessed to be bogus.</li></ul>



<p>Sars plans to get tough this year on tax dodgers by using machine learning and artificial intelligence to hunt down fraudulent claims.</p>



<p>The commissioner also revealed that despite a weak economy, Sars as of midnight managed to collect R1.4trn in tax revenue &#8211; growth of 5.3% for the 2019/2020 year. Most of the revenue was raised from personal income tax (R528.9bn or 39%), followed by value-added tax (VAT) contributing R346.6bn (25.6%), company income tax: R214.7bn or 15.8% and customs duties at R55.4 billion (4.1%). </p>



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South African Revenue Service is losing more than R100bn in tax, this is why…

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<p>In the last quarter British African Tobacco was among the top performers on the JSE. The cigarette company is now facing a backlash from the South African Revenue Service for allegedly R143 million tax bill. It also plans to cut 300 jobs to fight off the illicit market while committing its full R30 million tax rebate to the #TakeBackTheTax initiative fighting the illegal trade in cigarettes. BATSA Head of External Affairs, Johnny Moloto joins CNBC Africa for more.</p>


BAT sheds light on its tax battles

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<p>The South African Revenue Service workers have embarked on strike action as they have rejected the latest wage proposal of a 7 per cent increase; instead they are demanding 11 per cent increase. CNBC Africa reporter Karabo Lethlathla spoke to Sibusiso Valashiya who is the national Coordinator of The National Education Health and Allied Union (Nehawu).</p>


Nehawu’s Sibusiso Valashiya on why SARS workers are downing tools


<p>President Cyril Ramaphosa has appointed Edward Kieswetter as the new Commissioner for South African Revenue Service (SARS) with effect from 1 May 2019 for a term of five years.</p>



<p><em>Read the full statement below&#8230;  </em></p>



<p>The process for the appointment of the SARS Commissioner is informed by the South African Revenue Service Act and was guided by the recommendations of the Commission of Inquiry into Tax Administration and Governance by SARS chaired by retired Judge Robert Nugent.  </p>



<p>Among other things, the Nugent Commission recommended that the “candidate or candidates for appointment should submit to a private interview by a panel of four or more members selected by the President”, that the panel should make recommendations to the President and that the recommendations of the panel “should be made public”.  </p>



<p>The independent selection panel was chaired by former Minister of Finance Trevor Manuel and composed of the following members: • Ms. Angela Bester • Justice Dennis Davis • Ms. Sindi Mabaso-Koyana • Mr. Ismail Momoniat • Ms. Thandi Orleyn • Mr. Fezekile Tshiqi  </p>



<p>The position was advertised on 16 December 2018 and applications closed on 18 January 2019.  </p>



<p>Enquiries: Communications Unit Email: media@treasury.gov.za  Tel: (012) 315 5944  </p>



<p>The following six (6) candidates were shortlisted and invited to the final interviews: • Mr Nathaniel Mabetwa • Ms Sunita Manik • Mr Edward Kieswetter • Mr Mark Kingon • Mr Gene Ravele • Ms Nazrien Kader </p>



<p>The Minister of Finance submitted the panel’s report and his recommendation to the President on Monday, 25th March 2019. The President has accepted the Minister’s recommendation.  </p>



<p>The National Treasury is confident that the process undertaken has integrity and all necessary disclosures were made and no conflicts of interest have been identified throughout this process. </p>



<p>Mr Kieswetter emerged as the strongest candidate, based on his past experience as Deputy Commissioner for SARS between 2004 and 2009, and his subsequent track record of transformative leadership and his experience of turning around a large institution.  </p>



<p>During his tenure at SARS, Mr Kieswetter established the Large Business Centre and High Net Worth Individual Unit, leading to both compliance and revenue collection improvements. As Group Chief Executive of Alexander Forbes Group Holdings he achieved a significant turnaround of the group, with particular attention to governance, integrity and restoring the group’s reputation. </p>



<p>President Ramaphosa said: “We have every confidence that Mr Kieswetter has the experience, integrity and skills required to turn SARS around by restoring revenue collection, redirecting operations toward innovation, developing future leaders for the organisation, and restoring SARS’ credibility and integrity.” </p>



<p>Minister Mboweni wishes Mr Kieswetter success in this endeavour, and looks forward to seeing SARS re-established as a respected tax collector and improved revenue collection outcomes. “I expect him to act without fear or favour, to restore and defend the integrity of SARS and to uphold taxpayer rights when carrying out his duties as the Commissioner, by implementing the recommendations of the Nugent Commission and restoring SARS to a world-class organisation,” Minister Mboweni said.   The independent selection panel’s terms of refe</p>


SARS appoints new commissioner

<p>Bain &amp; Company, which has been in the firing line for its work done at the South African Revenue Service (SARS) has set aside R164 million ($10.8 million) of fees plus VAT and interest paid to it by SARS. In a statement it said “the money will be used either as prescribed by the Nugent Commission of Inquiry or – in the absence of such prescription &#8211; for the benefit of South Africa”.</p>
<p>In 2014, Bain conducted a diagnostic for SARS after being employed by the collection service’s then boss Tom Moyane. The plan has been widely criticised for weakening SARS’S collection abilities.</p>
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<p>In a statement, the consultancy service said its organisation structure work at SARS did not achieve positive results for its client.</p>
<p>Bain also revealed that Vittorio Massone will step down as managing partner, and be replaced by Tiaan Moolman, a long serving member of the company.</p>
<p>Massone however remains a partner at Bain &amp; Company and will focus his time on cooperating with the Nugent Commission, the statement said.</p>
<p>Elaborating it said: &#8220;We have requested Tiaan Moolman to take over day to day operations as interim managing partner. It has been known to our clients for some time that Mr Massone would rotate out of his current role in December to take on another senior role within the firm. This rotation typically occurs each 5-7 years and Mr Massone has already completed almost 9 years in his current role&#8221;.</p>
<p>Much of the destruction caused by Bain came to light at the Nugent Inquiry into SARS where Massone testified (see video). Following his and others’ testimony Bain &amp; Company launched an independent investigation led by global law firm Baker McKenzie to examine the facts relating to people, processes, and governance that resulted in it getting and accepting the work.</p>
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<p>In a statement Bain says initial findings have shown that its engagement with SARS fell short of its operating principles.</p>
<p>The consultancy also said to reinforce the independence of the investigation and Bain’s commitment to addressing any new facts, it has established an oversight committee made up of senior global Bain partners. “Athol Williams, a Bain alumnus and a respected independent advisor, will chair this committee on an interim basis. He is a distinguished academic in the areas of corporate responsibility, a corporate leader, and lifelong social advocate.”</p>
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Bain & Company plans to pay back $10.8 million for SARS work, Managing Partner changes role

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<p>SAP swooped on the home of the controversial Gupta family in a raid that included the Asset Forfeiture Unit and the South African Revenue Service. CNBC Africa&#8217;s Lubabalo Mashiqana spoke to NPA Spokesperson Luvuyo Mfaku for further details.</p>


NPA confirms raid at Gupta residence

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<p>The South African Revenue Service will continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.</p>


Sars outlines tax rules on cryptocurrencies

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<p>The good news is tax to be spent on South African citizens is up, the bad news is, it’s not as much as it should be.</p>


Sars seeks to improve revenue collection, restore credibility

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<p>Mark Kingon, Acting Commissioner for the South African Revenue Service details revenue collection for the 2017/2018 period to CNBC Africa’s Aviwe Mtila.</p>


Sars misses target of R1.27 trillion for 2017/2018

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<p>The South African Revenue Service says it’s ready to implement the increase in Value-Added Tax announced in February. Joining CNBC Africa for more on the changes is Narcizio Makwakwa, Acting Group Executive: Tax Relationships Management at SARS.</p>


SARS ready to implement new VAT rate

<p>By Moody&#8217;s Investors Service</p>
<p>London, 23 March 2018 &#8212; Moody&#8217;s Investors Service today confirmed the long-term issuer and senior unsecured ratings of the Government of South Africa at Baa3, as well as the (P)Baa3 senior unsecured shelf and senior unsecured MTN program ratings. The outlook was changed to stable. The rating actions conclude the review for downgrade that commenced on 24 November 2017.</p>
<p>The confirmation of South Africa&#8217;s ratings reflects Moody&#8217;s view that the previous weakening of South Africa&#8217;s institutions will gradually reverse under a more transparent and predictable policy framework. The recovery of the country&#8217;s institutions will, if sustained, gradually support a corresponding recovery in its economy, along with a stabilization of fiscal strength.</p>
<p>The stable outlook reflects a careful balance of risks. The new administration faces equally significant opportunities and challenges. Steady progress in meeting the objectives set out in the President&#8217;s recent State of the Nation Address (SONA) will be needed if the recovery in confidence that will be essential for the country&#8217;s economic and fiscal prospects is to be sustained. Success offers the prospect of a virtuous circle of economic recovery, fiscal consolidation and rising social cohesion. But the political, policy and practical challenges of meeting diverse economic, social and fiscal objectives cannot be underestimated. Failure, at least as perceived by investors or voters, could lead to a further cycle of eroding economic, fiscal and institutional strength.</p>
<p>In a related decision, Moody&#8217;s confirmed the government&#8217;s other short-term rating at (P)Prime-3. Moody&#8217;s also confirmed the Baa3 backed senior unsecured debt issued by ZAR Sovereign Capital Fund Propriety Limited, a special purpose vehicle whose debt issuance is ultimately the obligation of the South African government, and changed the outlook to stable.</p>
<p>South Africa&#8217;s long-term local-currency bond and bank deposits ceilings remain unchanged at A2, and the long-term and short-term foreign-currency bond ceilings are also unchanged at A3/Prime-2. The long-term foreign-currency bank deposits ceilings remain at Baa3, while the short-term foreign-currency bank deposits ceiling remains at Prime-3.</p>
<p>RATINGS RATIONALE</p>
<p>RATIONALE FOR CONFIRMING THE Baa3 AND (P)Prime-3 RATINGS</p>
<p>FIRST DRIVER &#8212; HALT IN THE DETERIORATION OF SOUTH AFRICA&#8217;S INSTITUTIONAL FRAMEWORK, WITH LONG-STANDING STRENGTHS PRESERVED AND SOME REBUILDING OCCURRING</p>
<p>The recent change in political leadership appears to have halted the gradual erosion of the strength of South Africa&#8217;s institutions. With changes in governance, a number of key institutions, including the Treasury, the South African Revenue Service (SARS) and key State-Owned Enterprises (SOEs) have embarked on the recovery of their earlier strength.</p>
<p>The technical strength and independence of South Africa&#8217;s media, civil society and institutions, including key ministries, the Reserve Bank and the judiciary, have been critical in sustaining the country&#8217;s credit profile over time. However, recent years have seen a gradual erosion in the strength of some key institutions, with a correspondingly negative impact on economic and fiscal strength and on the effectiveness of policymaking. High and rising concerns regarding endemic high-level corruption, &#8216;state capture&#8217; and pressures on the mandate and independence of key policy-making institutions such as the Reserve Bank have materially damaged economic confidence and effective policy-making, exacerbating the erosion in the government&#8217;s balance sheet.</p>
<p>Examples of the erosion of the government balance sheet are diverse, but include the increasingly entrenched financial challenges facing key SOEs, the decline in the capacity of SARS to collect revenue for the government and, most recently, the absence of any clear policy direction in the Medium Term Budget Policy Statement (MTPBS) published in October 2017, a key driver of Moody&#8217;s recent review of South Africa&#8217;s credit rating.</p>
<p>The recent change in political leadership offers a real prospect of a decisive reversal in that erosion of strength. While it is still very early days, the speed with which the President has moved to replace the leadership in key institutions, including the Ministries of Finance, Mineral Resources and Public Enterprises and most recently in SARS, illustrates the resolve to address the problems of the recent past and to set the state, society and the economy on a new and positive path. At the same time, the ambitious reform agenda set out in the SONA illustrates an acknowledgement of, and the intent to address, the range and depth of South Africa&#8217;s economic, fiscal and social problems.</p>
<p>SECOND DRIVER &#8212; IMPROVED GROWTH PERFORMANCE AND PROSPECTS</p>
<p>The change in political leadership comes in parallel with growing signs of cyclical, and perhaps structural, improvements in economic growth.</p>
<p>2017 was the second year in a row when growth outturned higher than initially forecast. Even if the improvement was to a large extent cyclical, driven by external demand and by one-off factors such as the easing of the drought, the prospect of higher than expected growth this year and next allows the government some additional fiscal and political space in which to pursue reforms.</p>
<p>Moreover, the recovery in growth has been mirrored more recently by a sharp recovery in business and consumer confidence, illustrated both in surveys, and by other indicators such as the recent recovery in the value of the rand. While confidence can dissipate quickly, if sustained through further actions, it offers the prospect of rising levels of investment in South Africa&#8217;s economy and enhanced medium-term growth.</p>
<p>The government recognizes the need to support improving confidence with steady progress on structural reform, including in the areas of mining, energy, the SOE sector and competition. Future growth prospects will inevitably reflect its progress in those areas. For now, though, the enhanced political and policy certainty ushered in by the recent changes offers some confidence that renewed business confidence will be sustained.</p>
<p>THIRD DRIVER &#8212; FISCAL ADJUSTMENT PLANS THAT WOULD STABILIZE AND EVENTUALLY REDUCE THE DEBT BURDEN</p>
<p>In marked contrast to last October&#8217;s MTPBS, the 2018 budget outlines a clear strategy for addressing rising fiscal pressures, with a front loaded, revenue-driven, fiscal adjustment, supported by material cuts in expenditures in this and subsequent years needed to finance, inter alia, rising expenditure on education.</p>
<p>The recently-announced one percentage point increase in VAT will broaden the fiscal policy response beyond the expenditure controls on which the government has increasingly relied in recent years. However, its significance goes beyond the moderate increase in revenues (of around Rand 22 billion) that the increase will allow. As the first increase in indirect taxes for over two decades, the change signals a marked, and credit positive, policy shift.</p>
<p>Overall, Moody&#8217;s now expects the government&#8217;s debt burden to stabilize at around 55% of GDP over the 2018-2020 period.</p>
<p>Significant uncertainties remain, and risks are tilted to the upside. Over the near-term, the departmental cuts required to support (inter alia) the increased spending on education announced under the previous Presidency will test policymakers and administrators alike. Hard political choices will arise; spending pressures from, for example, public wages and the cost of higher education, will persist. The still-fragile state of many SOEs, in particular Eskom Holdings SOC Limited, poses material contingent liabilities.</p>
<p>Set against that, a continued recovery in growth would boost revenues and provide further policy space.</p>
<p>RATIONALE FOR A STABLE OUTLOOK</p>
<p>The stable outlook balances upward and downward pressures.</p>
<p>Marshalled and developed by strong institutions pursuing an effective set of reforms and policies, South Africa&#8217;s economy has significant growth potential. A combination of growth, expenditure restraint and further improvements in the breadth of the revenue base and in collection capacity should, if pursued effectively, lead to the debt trajectory stabilizing in the next two to three years and ultimately reversing. Incoming policymakers have emphasized their commitment to addressing risks to the debt trajectory growth emanating from the SOE sector.</p>
<p>However, the authority and capacity of the incoming administration remains to be fully tested. The divisions within the ANC, and more broadly within society, as illustrated by the increasingly pluralistic political environment, will present policymakers with diverse and sometimes conflicting political priorities which will create policy uncertainty. The policy agenda itself is broad and challenging, and contains elements that have the potential to create tensions within the administration and society.</p>
<p>Two immediate examples are the still-to-be-agreed Mining Charter and the land appropriation without compensation initiative. On the former, the President has emphasized his intention to balance the conflicting priorities of industry, unions and the broader goal to encourage black economic empowerment of the industrial base. Satisfactory progress in this area will be an important test of the ANC&#8217;s authority and ability to reach the compromises needed to push through a broader reform agenda. Land appropriation is a long-standing objective of the ANC which has, for a number of reasons, assumed a higher profile in recent years. It remains unclear how the new government will pursue its objectives in this area, or what impact that will have on agricultural production and security. How the government acts will also provide important insights into how it plans to balance nearer-term economic objectives (to sustain confidence and promote investment) against longer-term social and economic objectives (to address unemployment, inequality and poverty).</p>
<p>In short, the outlook reflects two possible visions for the sovereign credit ratings: the first is a positive one in which a virtuous cycle emerges of economic growth, fiscal prudence and mounting social cohesion. The second is a more negative one in which policy ineffectiveness continues to undermine confidence, growth and social cohesion, with inevitable consequences for the government&#8217;s balance sheet.</p>
<p>WHAT COULD CHANGE THE RATING &#8212; UP</p>
<p>Future rating actions will most likely be driven by the effectiveness with which the government is able to address the institutional problems of the recent past in the pursuit of its economic and fiscal reform agenda.</p>
<p>The successful implementation of structural reforms to raise potential growth as well as stabilize and eventually reduce the debt burden, including through reforms to the SOE sector which reduce contingent liabilities, would put upward pressure on the rating. In particular, reforms resulting in higher savings and investment rates and broad-based, sustainable, job-creating growth, alongside rebuilding of fiscal buffers would provide positive momentum to the rating. In reaching such a conclusion, Moody&#8217;s would consider the longer-term ramifications of near-term fiscal and economic outcomes, as well as progress in enacting reform measures and resolving long-standing structural issues, including those relating to mining and agriculture.</p>
<p>WHAT COULD CHANGE THE RATING &#8212; DOWN</p>
<p>Conversely, South Africa&#8217;s ratings would be placed on negative outlook or review for downgrade, and eventually downgraded if it were to become clear that the government&#8217;s commitment to, or capacity to engineer, revived growth and debt stabilization were to falter. In reaching such a judgment, Moody&#8217;s would consider the government&#8217;s success in delivering planned structural reforms in the period between now and the 2019 Presidential elections, and to the impact of its actions or inaction on the investment climate and on near-term and potential growth. Negative developments in fiscal policy would also weigh on the rating. This includes the potential for SOE sector risks crystallizing in a manner which raised the government debt burden and put it on a higher trajectory.</p>
<p>GDP per capita (PPP basis, US$): 12,321 (2016 Actual) (also known as Per Capita Income)</p>
<p>Real GDP growth (% change): 0.3% (2016 Actual) (also known as GDP Growth)</p>
<p>Inflation Rate (CPI, % change Dec/Dec): 7.1% (2016 Actual)</p>
<p>Gen. Gov. Financial Balance/GDP: -2.5% (2016 Actual) (also known as Fiscal Balance)</p>
<p>Current Account Balance/GDP: -3.2% (2016 Actual) (also known as External Balance)</p>
<p>External debt/GDP: 52% (2016 actual)</p>
<p>Level of economic development: Moderate level of economic resilience</p>
<p>Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.</p>
<p>On 20 March 2018, a rating committee was called to discuss the rating of the South Africa, Government of. The main points raised during the discussion were: The issuer&#8217;s economic fundamentals, including its economic strength, have materially increased. The issuer&#8217;s institutional strength/framework, have materially increased. The issuer&#8217;s governance and/or management, have materially increased.</p>
<p>The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.</p>
<p>The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.</p>


Moody’s gives SA reprieve, keeps rating one notch above junk

<p>Mark Kingon was appointed acting head of South Africa’s tax office on Tuesday, hours after President Cyril Ramaphosa suspended his predecessor and days before a Moody’s review that could see the country lose its last investment-grade credit rating.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-302358 size-full" src="http://cnbc.africa/wp-content/uploads/2018/03/Tom-Moyane_SARS_GettyImages.png" alt="" width="850" height="579" /></p>
<p class="">The move was seen as a signal of intent to ratings agencies and investors that had lost faith in Africa’s most developed economy under former leader Jacob Zuma. It follows a cabinet reshuffle which sacked or demoted several allies of Zuma, who was forced to step down by the ruling ANC last month.</p>
<p class="">Ramaphosa suspended Zuma-appointed Tom Moyane late on Tuesday, saying he had failed as head of the South African Revenue Service (SARS) and had lost the confidence of taxpayers.</p>
<p class="">Kingon, SARS chief officer for business and individual taxes, was announced as acting commissioner on Tuesday.</p>
<p class="">Mindful that investors who finance its big budget and current account deficits have lost confidence in South Africa, Ramaphosa has begun to reform the economy and state-owned companies like power utility Eskom and South African Airways.</p>
<p class="">A test of whether his early changes have helped shift sentiment will come on Friday when credit rating agency Moody’s completes a review that could see it downgrade South Africa’s local and foreign debt to “junk” status.</p>
<p class="">“This (Moyane’s suspension) is a clear sign to Moody’s that strong steps are being taken to turn financial institutions around,” said Joon Chong, partner in Webber Wentzel’s Tax Practice. “We may avoid a downgrade by the skin of our teeth.”</p>
<p class="">Rating agencies Fitch and S&amp;P both demoted South Africa from investment-grade last year as economic growth slowed and public finances deteriorated.</p>
<p class="">Moyane, who was appointed in 2014, had been criticised by SARS employees and members of the ruling African National Congress after the tax agency missed revenue collection targets and faced allegations of corruption and mismanagement.</p>
<p class="">In last month’s budget the Treasury said it faced a 48.2 billion rand ($4 billion) revenue gap in the current 2017/18 fiscal year, partly due to SARS missing its collection target.</p>
<p class="">Moyane was not available for comment on Tuesday. He has repeatedly defended his record and had the support of Zuma.</p>
<p class="">But Ramaphosa said he had lost faith in his leadership.</p>
<p class="">“The disrepute in which you have brought the SARS and the government as a whole and the risk to the national Revenue Fund are enormous,” Ramaphosa said in a March 19 letter informing Moyane of his suspension that was seen by Reuters.</p>
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<p class="content_27_rw">Reporting by Joe Brock and Olivia Kumwenda-Mtambo; Editing by Catherine Evans</p>
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</div>


Zuma’s tax chief ousted ahead of South Africa ratings decision

<p>Statement by SA&#8217;s National Treasury and Presidency</p>
<p>Mark Kingon has been appointed as Acting Commissioner for the South African Revenue Service (SARS) following the suspension of Tom Moyane, the Commissioner of SARS by the President.</p>
<p>President Cyril Ramaphosa on Monday, 19 March 2018 informed Moyane of his suspension with immediate effect pending the institution of disciplinary proceedings.</p>
<p>President Ramaphosa said it was in the public interest to restore the credibility of SARS without delay.</p>
<p>In a letter to Moyane, President Ramaphosa said :Developments at the SARS under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen.&#8221;</p>
<p>Concern was raised in particular about the manner in which Moyane handled the matter of Makwakwa, his treatment of the report given to him by the Financial Intelligence Centre, and his failure to immediately report this to the Minister of Finance.</p>
<p>Another concern that was raised was the management of VAT refunds, which had brought the SARS into serious disrepute and potentially jeopardised the integrity of the SARS as collector of revenue and adversely affected tax morality among tax payers.</p>
<p>The decision to suspend Moyane follows a meeting in which President Ramaphosa informed Moyane that he had lost confidence in his ability to lead SARS and offered him an opportunity to resign with immediate effect, which Moyane declined.</p>
<p>President Ramaphosa indicated that as SARS Commissioner, Moyane holds a high position of trust in the management of the country&#8217;s public finances. It was therefore necessary to act urgently and immediately to protect the institution and place it on a path to stability and recovery.</p>
<p>Kingon is currently the Acting Chief Officer: Business and Individual Taxes, within SARS. He has been with SARS since its establishment and worked his way through the ranks to become the Group Executive: Relationship Management within Business and Individual Taxes.</p>
<p>&nbsp;</p>


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