By SVEN LUNSCHE

IT WAS supposed to have been a routine meeting for Finance Minister Trevor Manuel and SA Revenue Services' CE Piet Liebenberg last Tuesday, set up to iron out details of forthcoming legislation governing SARS.

However, Liebenberg came out of the meeting convinced that he could not achieve the autonomy he had hoped for when he joined SARS last year. Two days later - and with two years still left on his contract - he handed in his resignation, raising concern about future efficiencies at SARS.

Finance Minister Trevor Manuel is frank about the reason behind the move: "It was a matter of keeping SARS inside or outside of the public sector," he commented on Friday.

Manuel says forthcoming legislation would have given Liebenberg full control over SARS personnel, information technology and accommodation, thus moving it beyond the bureaucratic norms of Public Works and the Public Service Commission. These changes were still on track.

"However, we could not grant SARS full policy autonomy in the macro- or micro-sense."

In a brief comment on Friday Liebenberg would only say that he had no objection to being accountable to parliament. Manuel confirmed that this was not an issue.

After Liebenberg's exit, the Department of Finance immediately signalled its determination to keep recent improvements in tax revenue collections on track.

SARS commissioner Trevor van Heerden was appointed acting chief executive and Deputy Minister Gill Marcus will devote the bulk of her time in support of the body.

Sources also indicate that the legislation granting SARS relative autonomy is in the pipeline and should be tabled in parliament by mid-year. One of the major issues still to be finalised is the percentage of tax and customs revenue collected that will be allocated to SARS to cover its costs and pay its expenses.

Liebenberg has been credited with restoring a measure of respectability to SARS, which comprises the Receiver of Revenue and the Department of Customs and Excise.

While the exodus of skilled staff has not abated, it has slowed down. Liebenberg had hoped to attract top accounting and financial skills.

Staff at SARS said they were shocked by Liebenberg's departure and urged Manuel to take quick action to restore morale.

Improved tax collection is vital in the government's efforts to restore fiscal discipline. Amid signs that state expenditure continues at high levels, improved revenues are vital in achieving the Budget deficit targets promulgated in government's macro-economic plan.

In the 1996/97 fiscal year SARS was targeted with improving revenue collection by an additional R1.5-billion, and it managed to raise over R3-billion.

On Friday members of the influential parliamentary finance committee were caught off-guard by Liebenberg's resignation, Reuter reports. They were particularly astonished that Liebenberg's main reason for resigning was that SARS would not have total autonomy and would not be privatised.

"Total autonomy was not part of the original deal," Democratic Party finance spokesman Ken Andrew said. The committee's main concern had been that SARS would not be given administrative autonomy from the Public Service Commission and would not be able to recruit qualified staff at market rates.

Liebenberg's exit is the third resignation by a top official in the Finance department over the past 15 months. Former director-general Estiaan Calitz stepped down last year while state expenditure director-general Hannes Smit will not renew his contract when it expires at the end of this year.