Nhlanhla Nene was removed as finance minister on Wednesday.  Picture: TREVOR SAMSON
Former finance minister, Nhlanhla Nene. Picture: TREVOR SAMSON

FORMER finance minister Nhlanhla Nene had approved restructuring plans at the South African Revenue Service, the tax agency said on Friday.

In a statement, SARS said there was "nothing illegal" about the review, and the process had been approved by all relevant stakeholders.

The implementation of SARS’s new operating model was halted by Finance Minister Pravin Gordhan shortly after he was re-appointed to the post in December.

The far-reaching restructuring project for the tax authority was one of the first initiatives undertaken by SARS Commissioner Tom Moyane following his appointment as commissioner in October 2014. While Mr Gordhan requested that it be halted, announcements were made this week indicating that it was going ahead — a situation that is likely to result in clashes between the minister and the commissioner, who had a frosty relationship from the start.

In the statement on Friday, SARS also committed to releasing the KPMG report into an alleged "covert unit" and other governance problems at SARS in the "next few weeks". A leaked copy of the report late last year recommended that Mr Gordhan be investigated for his role in the setting up and running of the unit, according to Sunday Times.

This is likely to cause further tension between the pair.

The revamp of the organisation that included overhauling its operating model, IT system and personnel structure was scheduled to be completed in May this year.

Earlier this month, the Treasury had confirmed that the minister had asked SARS to place all major initiatives on hold but had not asked that the plans be terminated.

Once Mr Nene had approved the restructuring, the agency began discussions with other stakeholders including the South African Institute of Chartered Accountants, the South African Institute of Professional Accountants, business, organised labour and its employees.

"A presentation was made before Parliament’s Standing Committee on Finance (SCOF) and the ministerial-appointed SARS advisory board was engaged on three occasions," SARS said.

"The review process was designed to leverage off the phenomenal strides which have been achieved by SARS since its establishment approximately 19 years ago. It will also assist in the identification of growth opportunities, enhance accountability, and re-position SARS as a fair, transparent, innovative and leading tax administrator amongst its peers."

The review was intended to strengthen tax compliance and enhance taxpayer or trader service experience.