Adrian Lackay was the canary in the coal mine, warning of the dangerous situation that was unfolding at the South African Revenue Service under the leadership of Commissioner Tom Moyane. The former spokesperson of SARS resigned from the tax collector and wrote to Parliament in 2015 to tell MPs how Moyane was creating instability at the revenue service and how it would ultimately lead to revenue falls. What thanks did he get? MPs ignored his letters and Moyane slapped a R12m civil suit on Lackay. It was only in October 2018 that the lawsuit was dropped. Lackay now works for Public Enterprises Minister Pravin Gordhan. He told Alec Hogg that people who doubt Gordhan must not be swayed by the emotion behind his detractors who are driving a vociferous campaign on social media; they should look at the facts emanating from the various court cases. – Linda van Tilburg
Adrian Lackay has looked back at 2010 and said it was in the middle of the formative years for a formidable Revenue and Customs Administration. Compare that to the latest projections from the Minister of Finance, Tito Mboweni who has predicted a significant revenue shortfall for the current fiscal year. This comes on the back of successive fiscal years when there had been under-collection in revenue.
Lackay says the bailing out of Eskom and other state-owned enterprises leads to a fiscal situation where debt will continue to grow over the next three years. If revenue collection is not repaired or restored to previous levels, the fiscus and South African economy is going to have a growing problem. He was hoping that under a new Commissioner and hopefully a new management team; SARS would be able to regain some of its capability to actually meet revenue targets.
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Lackay says the legacy of the Moyane years is contained in the Nugent report that looked into tax administration. Nugent concludes that the revenue institution was basically dismantled, or more accurately “decimated” as Judge Nugent said in his report. Lackay described how SARS commissioner Tom Moyane dismantled the management capacity of SARS after six weeks in the post. The Chief Operating Officer, Mr Barry Hore left by December 2014.
Lackay says within the first three to four months after his appointment, Moyane created “absolute havoc” in the institution; it effected the ability of SARS to retain top skills and in the longer term to meet revenue targets and maintain the level of tax compliance that the country had at the time. He says there are a number of research papers from around the world that shows that there is a direct correlation between tax behaviour and citizen compliance and the belief that citizens have in the institution or government of the day.
Leaders that come in as commissioner and cause havoc and instability have a direct effect on compliance. Evidence was also presented to Judge Nugent that show once you allow these scandals to happen; it is hard to fix tax morality in the longer term. Lackay says the longer term effect of the decimation of SARS was a 1% increase in Value Added Tax, which affects everybody, those working and those that are unemployed. This was because the Treasury realised its fiscal constraints due to lower revenue collection and they had to increase the collection base, “which is a burden that all of us have to carry.”
Speaking about being a whistle blower to Parliament, Lackay said he wrote to the Finance Committee and the standing committee on intelligence in March 2015 telling them that they needed to look urgently into what was going on at SARS; that it will have a long term effect on the institution. He also suggested that should the MPs not want to speak to him, there were other people who worked with him for more than a decade and have since left SARS that they could contact.
Lackay told the MPs that they had an oversight duty. He said the response was that he was charged with defamation. There was no intervention politically from the legislature or the committees he approached. He said the extent to which state capture evolved and how they wanted to take over institutions like SARS became much more prominent and clearer from 2016 onwards when the Hawks and Shaun Abrahams started moving against Pravin Gordhan.
Lackay says some of the pieces of the puzzle started to fall in place from early 2016 onwards with the revelation of the #GuptaLeaks emails and the media exposés, and the subsequent evidence at the Zondo Commission. Lackay says we can not look back and say some of the people were not entirely wrong when they tried to flag issues at the time. He says now that there is a new President, “we should not take our eyes off the ball”. Civil society and the general public should remain very vigilant about “what is going down in the country.”
Lackay said there are people in positions of power like the Public Protector who are trying to disrupt the renewal process that President Ramaphosa is trying to initiate. He said the state-owned enterprises are still “in a very fluid place” and manifesting itself in a number of court cases and before the Zondo Commission of Inquiry. He says when he reads the judgements of the court cases, he gets the feeling “that all the wreckage of the past is not being addressed.”
Lackay says there is still a persistent, well resourced, well-funded campaign from various quarters to spread disinformation. There is a loud, vociferous campaign that questions the integrity of the President and specifically targets Pravin Gordhan. There is also with the EFF a vocal, active social media presence that praise the Public Protector for competence.
He says the only recourse for him as spokesperson for Pravin Gordhan is to wait when court arguments are presented at the courts, including the Constitutional Court that concern themselves with the facts. For citizens who are not sure who to believe, “you need to make the effort to following the facts and read the judgements.” Lackay says the Constitutional Court judgement on the Public Protector is absolutely scathing about her conduct.
