There are lessons to be learnt from the hullabaloo around South African Revenue Service (Sars) commissioner Edward Kieswetter’s discourse on taxation strategies, the blame game over the National Treasury’s VAT hike (seemingly planned in a secret bunker) and the resulting nondelivery of the budget on February 19. The shallow reading, poor understanding and authoritarian tendencies of our most senior politicians have been laid out for all to see.
On February 18, the day before the budget that was not to be, Business Day ran a good story with a misleading headline, “Sars boss warns against tax hikes”.
It seems everyone who could have doused the flames — the media, minister of finance Enoch Godongwana, Treasury director-general (DG) Duncan Pieterse, minister in the presidency Khumbudzo Ntshavheni and the army of communications people, chiefs of staff, deputy directors-general, PAs and other hangers-on — read only the headline. Had they got as far as the sixth line of the story, they would have noted that Kieswetter’s comments about approaches to improving tax revenue were made in January during a webinar hosted by fund manager Allan Gray.
In it, Kieswetter offered a typically scholarly monologue revealing sympathy for the minister’s difficult fiscal position. He spoke about how the compound impact of efficiency at the revenue service would “reduce the temptation to increase or hike tax rates” and how “an appropriate investment in Sars” would help it “effectively administer its mandate”. He spoke of the space this would create for the Treasury to start chipping away at the debt burden. It is the opposite of controversial.
But stories from inside the last-minute cabinet meeting, in which Godongwana and Pieterse sprang their VAT hike on a stunned audience, tell how ministers from the ANC and across the coalition pushed back. In doing so some cited Kieswetter’s “advice”, setting out the notion that the Sars boss had been on some kind of media tour to trash the budget. That headline had morphed into a reality of its own.
If you dig into the Sars Act, you will find the revenue service is mandated to advise the minister of finance on matters pertaining to revenue. But Kieswetter gave no such advice, merely a considered view on possible tax scenarios to the assembled investors.
A scapegoat is useful for both the ANC and the Treasury to explain the failure of the budget
The accusation that he briefed against the minister is serious and false. But if you have an environment where nobody reads, such as the Treasury and the presidency, it can result in the type of response we saw from the ministers and the DG in their now infamous hot mic moment. “He is making me angry, even here he comes up with this rubbish,” Godongwana fumed. In reply, Ntshavheni contemptuously, and in line with her growing reputation as a bully, asked “Uhamba nini yena? [When is he going to leave?]” of one of the country’s most senior civil servants.
Kieswetter isn’t likely to talk about any of this, and no doubt the ministers didn’t plan to either. But whether they like it or not, the hot mic bungle reveals how little the ministers and their top aides care about the truth.
That is probably because a scapegoat is useful for both the ANC and the Treasury to explain the failure of the budget, an embarrassing shambles that could have been avoided. Studiously apolitical Kieswetter no doubt fits the bill.
The truth is that the collapse of the budget was the sharp end of electoral consequences for the ANC, and South Africans are tired of watching the fruits of their labour being squandered by a rotten and incompetent state. Kieswetter’s thoughtful discussion of possible tax scenarios is only controversial to those in need of a controversy. Let us not be distracted by such nonsense.
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