Commission hears how new SARS operating model left criminal bosses free from penalty

A senior manager at the South African Revenue Service on Wednesday gave a scathing account of how former tax boss Tom Moyane’s new institutional model crippled the organisation’s investigative capacity‚ leaving criminal bosses free from penalty.

Keith Hendrickse‚ who previously served as a senior manager for national projects‚ described how his unit was shut down without consultation‚ leaving high-profile cases involving poachers‚ drug lords and gang bosses up in the air.

He was speaking before the commission of inquiry into tax and governance issues at the revenue collector on Wednesday.

Hendrickse was based at a Cape Town office which was shut down with almost immediate effect after Moyane took over the reins. 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.

“He (Moyane) said the new operating model had disbanded national projects. There was no consultation…One of the projects required a tax inquiry to get to the bottom of who owned what in this abalone poaching syndicate. What they (SARS’ audit division) did was‚ they finalised those cases at face value which was nowhere near what it should have been when it came to the wealth of those taxpayers‚” Hendrickse said.

Hendrickse said 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.

“I was a senior manager and for about four to five months I didn’t do anything‚ nothing at all. I came to work every day and eventually on my own request I was allocated as a senior specialist to criminal case selection and that’s where I work today‚” he said.

He described another case where a “criminal boss” owed about R400-million to SARS.

“The particular taxpayer in this project‚ he owed R400-million and we were busy in litigation. He was challenging us in court and we won every single challenge. There was a unit started within SARS that somehow became known as internal investigations. I met a man‚ a SARS auditor (from internal investigations) in an elevator at the Cape Town office…he said he’s come to fetch the audit files of Taxpayer X; we had already been disbanded by then‚” Hendricks said‚ further describing how he refused the request.

“Then I was called by the person leading the unit here in Pretoria and told to provide the files. The auditor in Cape Town had been instructed to contact the taxpayer and tell him they were doing an audit review. There was no such thing. The taxpayer produced this email in court and said you can’t carry on because you are doing an audit review. That prevented SARS from collecting any money for two years. The taxpayer has to date not paid a cent.”

Judge Robert Nugent‚ who is heading the commission‚ asked Hendrickse what SARS’ current investigative capacity in the Western Cape was.

“There’s nothing. There’s no one there‚” he replied.