Division of Revenue Bill [B5-2019]

The Select Committee on Appropriations invites you to make written submissions on the 2019 Division of Revenue Bill that was tabled 2019/20 Budget by the Minister of Finance

The Bill proposes to provide for;
• the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2019/20 financial year,
• the determination of each province’s equitable share and allocations to provinces, local government and municipalities from national government’s equitable share and the responsibilities of all three spheres pursuant to such division and allocations.

Public hearings will be conducted at Parliament by the Select Committee on Appropriations on Friday, 8 March 2019.

Comments can be emailed to Mr Lubabalo Nodada at [email protected] or Ms Estelle Grunewald at [email protected] by no later than Wednesday, 6 March at 16h00

Enquiries can be directed to Mr Lubabalo Nodada on tel (021) 403 3669/083 412 1526 or Ms Estelle Grunewald on tel (021) 403 3843/071 363 2257


Background
Section 214(1) of the Constitution of the Republic of South Africa, 1996, (‘‘the Constitution’’) requires that an Act of Parliament must provide for— (a) the equitable division of revenue raised nationally among the national, provincial and local spheres of government; (b) the determination of each province’s equitable share of the provincial share of that revenue; and (c) any other allocations to provinces, local government or municipalities from the national government’s share of that revenue, and for any conditions on which those allocations may be made. Section 10 of the Intergovernmental Fiscal Relations Act, 1997 (Act No. 97 of 1997), requires that, as part of the process of the enactment of the Act of Parliament referred to in paragraph 1.1, each year when the annual budget is introduced, the Minister of Finance must introduce in the National Assembly a Division of Revenue Bill (‘‘the Bill’’) for the financial year to which that budget relates. The Intergovernmental Fiscal Relations Act, 1997, requires that the Bill be accompanied by a memorandum explaining— (a) how the Bill takes account of each of the matters listed in section 214(2)(a) to (j) of the Constitution; (b) the extent to which account was taken of any recommendations of the Financial and Fiscal Commission (‘‘the FFC’’) that were submitted to the Minister of Finance or were raised during consultations with the FFC; and (c) any assumptions or formulae used in arriving at the respective shares of the three spheres of government and the division of the provincial share between the nine provinces. In terms of section 7(4) of the Money Bills and Related Matters Act, 2009 (Act No. 9 of 2009), when tabling the budget, a report must also be tabled that responds to the recommendations made in the reports by the Parliamentary Committees on Finance on the proposed fiscal framework in the Medium Term Budget Policy Statement and the reports by the Committees on Appropriations regarding the proposed division of revenue and the conditional grant allocations to provinces and local government as contained in the Medium Term Budget Policy Statement. The report must explain how the Bill and the national budget give effect to, or the reasons for not taking into account, the recommendations contained in the Committee reports. The memorandum referred to in paragraph 1.3 is attached to this Memorandum and will also be attached as ‘‘Annexure W1’’ to the Budget Review, and the report referred to in paragraph 1.4 will be tabled with the budget. The Bill is introduced in compliance with the Constitution, the Intergovernmental Fiscal Relations Act, 1997, and the Money Bills and Related Matters Act, 2009, as set out in paragraphs 1.1 to 1.4. The allocations contemplated in section 214(1) of the Constitution are set out in the following Schedules to the Bill: • Schedule 1 contains the equitable shares of the three spheres of government; • Schedule 2 sets out provincial equitable share allocations; • Schedule 3 sets out local government equitable share allocations per municipality; 57 • Schedules 4 to 7 deal with grant allocations for provinces and municipalities, including allocations to supplement funding of functions funded from provincial and municipal budgets, specific purpose allocations, allocations-in-kind (indirect transfers to provinces and local government) and the release of funds to provinces and municipalities for immediate response to a disaster.