Sars’ companies register is inaccurate, inquiry hears

The South African Revenue Service’s corporate income tax register was “inaccurate”, Fabian Murray, Sars acting chief officer for business and individual taxes, told the Sars Inquiry on Monday.

Sars has a register of 5.5 million companies, including one million active companies, while the Companies and Intellectual Property Commission, which falls under the Department of Trade and Industry, has a register of two million companies, he added at the Sars headquarters in Pretoria where the Sars Inquiry has been hearing testimony.

“It’s a clear indication that our corporate income tax is not accurate,” Murray said.

He recommended that in future Sars commissioners should be “apolitical”.

“The new commissioner should not undervalue the institutional knowledge and experience vested in many of the existing Sars leaders when he or she appoints his or her executive team.”

“My view is that you need a reputable diverse panel appointing the [Sars] commissioner,” he said.

Such a panel should understand Sars’ business, as well as panel members with broader leadership experience, he added.

Murray accused Sars of having a “draconian recruitment policy” under the reign of suspended Sars commissioner Tom Moyane.

“A memo was approved on the fifth of July 2016, which gave effect to the practice in which certain designed groups – mostly African employees – were ring-fenced for vacant positions within Sars. The memo stated that no deviations would be allowed on the basis of race and in exceptional circumstances deviation on the basis of gender would be considered.

“During the recruitment process, this rule was strictly enforced. In many cases, Indian, coloured and white employees were not shortlisted although they met the minimum requirements for the job as well as being recognised as capable resources,” said Murray.

“It is my assertion that this filter should be applied at the final selection stage and not upfront during short listing. This resulted in internal grievances as well as disgruntled employees, who felt their exclusion from Sars’ recruitment process left them with limited career opportunities and advancements. This significantly impacted their level of engagement and commitment – this is well borne out in a recent connection survey. Any deviation at interview stage had to be approved as an exception by the employment equity unit as a deviation. Sadly this practice remains in force today,” he said.

“The way employment equity targets were enforced at the pre-interview short listing phase resulted in excluding certain groups that met all job requirements at the short listing stage. Surely this is not aligned with good practice?”

The Sars Inquiry is looking at the governance of the tax collection agency from April 1 2014 to March 31 2018.

This covers most of the time that Moyane was in office. He joined Sars as commissioner on September 27 2014 and President Cyril Ramaphosa suspended him on March 19 this year.

	Justin Brown Business editor City Press p: 0117139001 w: www.citypress.co.za  e: justin.brown@citypress.co.za
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