National Treasury, SARS, Statistics South Africa: Budgetary Review & Recommendation Report 2010

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Finance Standing Committee

20 October 2010
Chairperson: Ms N Sibhidla (ANC)
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Meeting Summary

Members of the Committee put forward recommendations arising from the annual reports presented by SARS, the National Treasury and Statistics South Africa. These included widening the net for tax collection, combating fraud and corruption, improved co-ordination within National Treasury, and consumer protection from financial exploitation.

Meeting report

The Chairperson said the meeting represented the start of a new process for all parliamentarians with the Budgetary Review and Recommendation Report. As there were no precedents, it would be up to the Committee to decide on what procedure to follow. She proposed two options – that the departments’ reports be interrogated programme by programme, or that members, having studied the reports and understanding the challenges, could put forward their own recommendations.  The members agreed on the second option.

The following recommendations were proposed:

Dr D George (DA) said that SARS’s key function was tax collection. It was therefore important for the revenue net to be spread as widely as possible. There were many sectors in the economy that were still outside the net. His recommendation was that SARS should accelerate its programme to bring these sectors in as soon as possible. Anecdotal evidence suggested that more than R10 billion in taxable money was not accounted for – money that was needed for service delivery.

He said the National Treasury’s prime duty was to ensure peoples’ money was properly spent. This meant that “leakage” through fraud and corruption had to be minimised. There appeared to be a massive amount of leakage at present, which literally stole money from the people. The Treasury needed not only to focus on the problem areas they had identified, but also on ensuring that this led to consequences in the form of prosecutions.  Without consequences, the cycle of fraud and corruption would carry on.

Ms N Balindlela (COPE) said there appeared to be a lack of coordination between the various entities within the National Treasury. Everyone acknowledged they received reports, but the manner in which they were acted upon needed to be tightened up.

She also called upon those departments which were supposed to be responsible for drawing up a single national business register, to coordinate their efforts.

Ms Z Dlamini-Dubazana (ANC) asked that the National Treasury be required to provide the committee with a detailed progress report on the preferential procurement policy.  She also wanted the Medium Term Budget Policy Statement (MTPBS) to be tabled early in October in order to allow the processes as required by the Money Bills Act. She said Stats SA needed to maintain financial discipline at all times, and also ensure that its record keeping and disclosure notes were always accurate.

Dr George said he would like to see a deadline established for work on the Stats SA service delivery index.

Ms P Adams (ANC) recommended a review of the format of reports by departments to Parliament, as well as a review of parliamentary programmes in order to accommodate the Budgetary Review and Recommendation Report (BRRR) programmes.

Mr D van Rooyen (ANC) said the Committee had requested Stats SA to provide a breakdown of cases involved in the wasteful and fruitless expenditure identified in its report.

Dr George recommended that the National Treasury should take steps to strengthen the national regulatory framework, in order to provide better protection for consumers. Although the Financial Services Board
(FSB) was able to offer a certain level of protection, there were circumstances where people were exposed to financial exploitation, without recourse to assistance.  This was an aspect that required Treasury’s attention.

Dr Z Luyenge (ANC) said Treasury had an overarching responsibility to all spheres of government, but that responsibility was seemingly not employed. There was no clear role that indicated it engaged with local government, or imposed sanctions against perpetrators of fraud or corruption, so it needed to “tighten the screws” of financial management.

In response to questions on whether members felt SARS, National Treasury or Stats SA required more or less funds for the forthcoming budget period, Dr George said that as none had asked for more money, it could be assumed that they expected to be able to meet their objectives without additional funding.

Mr Van Rooyen, however, argued that if one looked at the Committee’s recommendations, the expansion of services and enhanced coordination all had financial implications.

The Chairperson said the best way to deal with the issue was to follow the legislative requirement, which was to make recommendations to the executive member responsible for each particular institution. Based on those recommendations, they would come back to the Committee and quantify their financial requirements to carry out the work proposed in the recommendations.

She asked the secretariat to prepare a first draft for consideration by the Committee on 26 October 2010.


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