QUOTE OF THE WEEK
"As soon as fear approaches near, attack and destroy it"
-- Chanakya, Indian politician, strategist and writer

Q & A

Sudhamo Lal, Director General, Mauritius Revenue Authority 

“Combating fraud and corruption is the main objective of the MRA”

* “Results have to be achieved in accordance with the law” 

In the wake of the allegations of ex-Director of customs Bert Cunningham directed against his former employer, the MRA, we have forwarded a number of questions to Mr Sudhamo Lal on the points raised by Mr Cunningham. The brevity of and caution in the answers of Mr Lal speak says a lot about the guarded position which the MRA is adopting in the current situation…  

Mauritius Times: After all has been said and done, have you been able to understand why Mr Bert Cunningham has chosen to go this far in his allegations against the MRA and other institutions of the country and specifically at this particular time ? 

Mr Sudhamo Lal: Well, this question should be put to Mr Bert Cunningham who would be in a better position to reply. I have not been able to understand as to why he has chosen to go this far as putting an end to the contract was with mutual consent and included a dignified and honorable exit strategy. 

* Is there more to what has come out in the public that would explain Mr Cunningham’s coming out in public like this? 

-- Again this is a question which can only be replied by Mr Bert Cunningham. I am not in position to venture on this. 

* Would it have been fairer on the part of the authorities to reach an amicable exit -- without all the noise and rumour that we have seen -- for someone who, it is reported, has been dedicated in his duties and been non-complacent vis-à-vis fraudsters and corrupt officials? 

-- I entirely agree that an amicable exit was the most desirable strategy for both parties. We are dealing with the cases of Directors and we are talking of the qualities and the role as a leader. If there is a divergence between the management style/strategy/understanding of the persons at the leadership level and if it cannot be resolved, the continued conflict would endanger the sustainability of the organization. MRA is a very young organization and has been able to depict a positive tangible improvement but still faces a great challenge of continuity and sustainability. Any dissatisfaction at the management level or any issue of lack of integration could cause damage to the MRA.

A person individually may be competent and skilled but can only achieve results provided all the functions are done in accordance with the law and with positive interaction between various departments and units. MRA is an organization having functional organizational structure wherein the compliance departments cannot produce any results without the active participants of the support departments. It is based on shared services and thus can only achieve results if there is a close interaction between the various units. 

* The impression has been created that Mr Cunningham was amongst the very few in the MRA who sought to combat fraud and corruption in the customs and that with his departure things will go from bad to worse. How far is this justified? 

-- Combating fraud and corruption is the main objective of the MRA; a specifically dedicated unit namely Fiscal Investigation department has been set up to tackle the issue of fraud and corruption. During its first year, the Fiscal Investigation Department collected Rs 136 M and in the second year an amount of Rs 98 M was collected. There is also an intelligence unit that has also been set up. Since the duties are going down in Customs every year, there is also less potential for fraud on account of undervaluation and customs duties, however, narcotics and terrorists’ traffic is an important activity of Customs. In these activities the major thrust is drawn by ADSU and Department of immigration; and I do not believe there would be any deterioration in this area of activity. 

* The MRA has rapidly moved, during the same week that Mr Cunningham was shown the exit door, to fill in his vacant post with a notice inviting applications from « high calibre professionals ». Is the MRA still open to applications from foreign nationals after the Cunningham episode?  

-- Recruitment for the post of director shall be made through public advertisement and the post will be open to local and international candidates. 

* You have tried to minimize the importance of Customs by saying that, due to the various cuts in tariffs and duties over the years, it accounts for an annual total revenue of only Rs 1.3 billion out of total collections of over Rs 40 billion by the MRA. Does this suggest that the duty of care and attention gets diminished the lower the amount the MRA collects from a service? 

-- The role of customs as a revenue raising organization has decreased

everywhere in the world; so is the case in Mauritius. The Customs has, however, an effective role to play in law enforcement to address the issue of narcotics, weapons and trademark infringements. Customs will continue to get the attention of the Government and MRA. In fact Customs plays an important role in trade facilitation which reduces the cost of doing business which renders Mauritius competitive and will ultimately result in improvement in growth and revenue. 

* What are your feelings regarding the setting up of a Single Border Agency, as suggested by Bert Cunningham, that would look after Customs independently of the MRA? 

-- The MRA has been operational only for two years and it is too premature to talk of changing the organizational structure. The MRA has adopted the best organizational structure and this has been approved by the Board and the Government. Similar organization structure is present almost everywhere in the world.  I believe it should be given a chance. 

* Is it not necessary to give a certain amount of autonomy within the various departments of the MRA instead of tying them down to strict bureaucracy that may stifle initiative and undermine the reform program of the government? 

-- The MRA was established to achieve efficiency gains. It has compliance departments namely Large Taxpayers Department, Medium and Small Taxpayer Department, Fiscal Investigation Department, Customs and there is a department of Tax operations for shared services and department of Human Resource & Training, Finance & Administration, Internal Affairs, and Internal Audit as corporate services. They have to work as a team. This system is different from previous cylindrical organizational structure where each department had all the functions. Everywhere functional organizational structure has yielded results. There is, however, a precondition, i.e., to work as a team. The procurement of all departments has to be made by the Finance & Administration department. The recruitment and training of staffs has to be made by the Human resource and training department and simultaneously there is a department for each function. Every department is interdependent of other department and thus there is more autonomy and there is no centralized structure. 

* With all the street hawkers and drugs proliferating in the country, will you say that we have efficiently “closed” our entry points in the country and that there is little need to tackle the job with greater force? With better results? So that Customs is not only considered as a revenue earning enterprise but as part of a serious national mechanism for repressing cross-border crimes and ensuring a fairer sharing of the tax burden among citizens? 

-- Narcotics is a subject of ADSU which primarily drives the operation. Customs is a secondary stakeholder at airport. It has to work efficiently to support the functions of ADSU. 

* Why is it necessary to have the representatives of the private sector in the Board of the MRA? What sort of independence of mind will they bring to it if they are found defending the interests of their members against the tax authorities as it serves their purpose? 

-- Irrespective of the composition of the Board of the MRA, policy issues relate to Government. 

* Although the Prime Minister has asserted in Parliament that the allegations of Mr Cunningham regarding an institutional mafia operating in the country are « unsubstantiated » and do not call for  the setting up of a commission of inquiry, one could argue that such a commission would have helped to vindicate the credibility of all the institutions, including the MRA, that have been targeted by Mr Cunningham, isn’t it ? 

-- I believe that this question pertains to the Prime Minister or to the Government.