Soon after taking over he took on a listed company, and it tested his principle of "pay now and argue later". The case went to the Constitutional Court and he won. "That sent out a message to the corporate world: 'Hey guys, you've got to take this administration seriously'."
Now when "trouble brews" with one particular company or sector he meets the CEO and a showdown is usually averted. These private assignations have now become legendary in corporate circles.
In a bid to keep up the momentum, Mr Gordhan has launched a public information campaign across the country, and even classes on filling out tax returns at high school. "You have to keep the moral pressure alive, to say to people you have to pay tax if you want to get benefits."
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Tax activist fills South Africa's coffers
By in Cape Town
Published: February 24 2007 02:00 | Last updated: February 24 2007 02:00
When South Africa's ebullient finance minister Trevor Manuel unveiled the budget to the media this week, so reticent was the headmasterly figure on his right that the first question to come his way was whether he had retired.
It was of course a joke. If there is one man apart from Mr Manuel whom President Thabo Mbeki does not want to lose from his senior team, it is probably the 57-year-old Pravin Gordhan, South Africa's self-styled "activist" tax collector.
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In the seven years since he took over the South African Revenue Service, Mr Gordhan has overseen an astonishing turnround in performance that has led to an average annual increase of 10 per cent in tax revenues.
In the end, "the proof is in the pudding", says the former Communist party activist and member of the African National Congress' underground network in the apartheid era. "Is the money in the bank or not?"
The answer is a resounding yes. Aided by the buoyant economy and high commodity prices, he and his team have filled the state coffers to levels unimaginable a decade ago. In the current financial year the revenue service expects to have raised R486.4bn ($68.7bn, €52.4bn, £35.2bn), up from R417.3bn last year.
Its success is all the more striking at a time when a number of other government departments have become notorious for bureaucracy and inefficiency.
When he took over in 1999, Mr Gordhan faced two big challenges. The first was to coax, cajole and ultimately threaten companies that had become used to a laxer system in the apartheid era to make them co-operate.
"There was a particular kind of compliance culture [under apartheid]," Mr Gordhan tells the Financial Times. Asked if he does not mean "non-compliance", he concedes that he had been trying to be polite.
"For South African business to thrive [n the era of sanctions against the apartheid regime] it had to scheme its way around and develop its own creative mindsets."
Soon after taking over he took on a listed company, and it tested his principle of "pay now and argue later". The case went to the Constitutional Court and he won. "That sent out a message to the corporate world: 'Hey guys, you've got to take this administration seriously'."
Now when "trouble brews" with one particular company or sector he meets the CEO and a showdown is usually averted. These private assignations have now become legendary in corporate circles.
His other big challenge was to try to overturn the ethos of the old days when the ANC urged non-compliance with the authorities to hasten the end of white rule. "There was a black population that had disengaged economically," he says.
That also seems to be changing. Between March 1996 and March last year the tax base more than doubled from 1.9m individuals to about 5m. In the same period corporate registrations increased from 518,000 to 1.8m. "We have turned a major corner to what may become a normal situation," he says.
In a bid to keep up the momentum, Mr Gordhan has launched a public information campaign across the country, and even classes on filling out tax returns at high school. "You have to keep the moral pressure alive, to say to people you have to pay tax if you want to get benefits."
A pharmacist by training, he believes his experience as an activist in the 1970s and 1980s has stood him in good stead. "We are used to the idea of mobilising people around a particular cause, persuading and cajoling them to move in the right direction."
Under his leadership, the revenue service has gained a reputation for being hard-edged, but he is used to dissent. In the early 1990s he chaired the multi-party talks at Johannesburg's World Trade Centre that negotiated the end of white rule.
His sometimes hectoring style played a vital role in saving the talks when the diverse participants - from the far-right white parties to the Pan Africanist Congress - threatened to, and sometimes did, storm out.
So what about the retirement question? South Africa's Weekender newspaper suggested recently he should become commissioner of police and take over the fight against crime.
That, as some government officials concede, is one of several posts that could do with an "activist" new boss.
Copyright The Financial Times Limited 2007
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