Much has been done to restore the operational capacity of the SA Revenue Service (Sars), to boost its ability to collect taxes and restore its credibility but little has been done to heal the deep wounds inflicted on employees under former commissioner Tom Moyane.
KPMG’s decision to pay reparations to those affected by its dodgy "rogue unit" report may appear, to the cynical, to be a self-serving farce. But to those affected by state capture at the tax agency, it could be a long-awaited step in the right direction.
The audit firm’s report not only had an impact on individuals at Sars but also on government finances. The R100bn hole in tax revenue at the height of the capture of Sars was due in part to the flailing capacity at the institution, made possible by the institutional culling which followed in the wake of that report.
KPMG withdrew the findings and recommendations and repaid the R23m Sars paid in fees and this week Business Day quoted its SA chair, Wiseman Nkuhlu, raising the prospect of reparations to Sars employees.
The disgraced audit firm could simply be trying to cover its own back, in a bid to minimise the possibility of litigation by Sars employees hit by its "rogue unit" report. Still, it appears to be more than even Sars has offered to current and former employees.
Moyane weaponised the KPMG report, using it to drive the "rogue unit" narrative. The report named and implicated four individuals: former Sars deputy commissioner Ivan Pillay, former head of enforcement Johann van Loggerenberg, former head of strategic planning Pete Richer and official Yolisa Pikie.
This report was used to target and overhaul units at Sars and as the basis of subsequent reports.
The Nugent report into Sars spelt out what steps should be taken next. But little has been done
It is useful to recall the unsavoury way the report was compiled. Moyane had his lawyers draft a memo to KPMG which effectively dictated what findings and recommendations the audit firm should include in the report. These findings made it into the final report almost verbatim. KPMG admitted during the Ntsebeza commission of inquiry into the conduct of auditors at the firm that its head of forensics who worked on the report, Johan van der Walt, had literally cut and pasted the findings from the memo.
Almost two years ago, the commission of inquiry into governance and administration at Sars, headed by retired judge Robert Nugent submitted its final report to President Cyril Ramaphosa. The Nugent report detailed the capture of Sars as among the most audacious and arguably destructive plays by the group linked to and led by Jacob Zuma. It spelt out what steps should be taken. Little has been done.
Among the recommendations is a call for a probe into alleged fraud by Moyane and his accomplices at Boston-based consultancy Bain & Co for the way in which the company was appointed to overhaul the Sars operating model, a contract worth R200m.
The National Prosecuting Authority leadership’s "deer in the headlights" moment has not yet passed and it has not attempted to prosecute even apparently easy targets.
But the chain of events spelt out before the Nugent commission was made possible by the KPMG report. So who will stand to benefit from the firm’s reparations offer when dozens of Sars staffers as well as former employees were directly or indirectly affected by the capture? Sars staffers, according to a July News24 report, were consulting lawyers about claiming damages from either Sars or KPMG.
The KPMG report was a key enabler of the capture at Sars and the destruction following Moyane’s appointment. Talk of reparations is a step forward for KPMG, but justice for the dozens affected remains elusive.
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