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SECURITY AND CONSTITUTIONAL AFFAIRS SELECT COMMITTEE
12 June 2002
PRIVATE SECURITY INDUSTRY LEVIES BILL: BRIEFING
Documents handed out:
Private Security Industry Levies Bill [B11-2002]
The Secretariat together with Adv Kok gave a presentation on the Private Security Industry Levies Bill. The effects, both positive and negative, were discussed by the Committee during the discussion session. In essence a levy shall become due for every private security company and officer which will be applicable for a period of five years.
Private Security Industry Levies Bill
Mr A Soman of the Secretariat noted that the Private Security Industry Regulation Act [No 56 of 2001] had been passed last year making it possible for a regulatory council to regulate the private security industry.
This Bill deals with powers of Council to impose levies on private security service providers and officers. It also empowers the Council to vary the levies and to determine differential levies for different categories of security service providers.
He going through the Bill, he noted the typographical error in Clause 1 (Definitions).
Clause 2 empowers counsel to impose levies. The bill provides a procedure to collect these levies and all related procedural matters must be regulated by and reported to the Minister of Safety and Security.
All levies are to be collected and records must be kept for accountability purposes. There shall be annual reports to the Minister who shall assess if the budget is adequate for the consecutive years.
Clause 5 deals with the consequences of businesses who refuse to pay a levy. There are penalties such as suspension of their registration and lapsing of the registration of the companies. Clause 6(1) allows for levies to lapse after 5 years. The Minister has the power to approve or disapprove the re-imposition of the levy - in concurrence with the Finance Minister. Clause 8 binds the state to this Act and Clause 9 deals with repealed provisions.
Mr Kok continued with the briefing. He noted that all clauses are fairly simple and he pointed out the typographical errors in the Bill. At the moment the funding of security regulation is done in terms of the repealed legislation because the Levies Bill still had to be passed first. As it is a Money Bill, it cannot be amended by Parliament.
In Clause 2(1)(d) it states that the differing amounts of levies are determined by the Council The Department of Finance wanted the clause in to make provision for different categories of providers to pay different amounts. Problems however lie in the political arena as to what the criteria should be for the different categories - should the monthly gross income of the security officers be a criteria? Levies will vary according to the size of the business depending on the net and gross income as well as the number of security officers and their training level, position and function.
The Chair asked what the proposed amendment was for Clause 1's typographical error.
Mr Kok said that certain words had crept in after the bill had been proof-read and it should omit "and regulatory 2(1) of Private Security Industry Regulation Act".
Mr Lever believed that Clause 2(1)d(iii) implies that the income is really a tax since the levies do have the same effect as a tax. Also Clause 2(4) gave the Minister of Finance the right to change the levies in consultation with the Minister, does this give the ministers the right to raise and lower the levy or just lower it? He further wanted to know from when one calculates the 5 year period. He suggested that the superfluous provision of Clause 9 should be deleted.
Another committee member said that Clause 2(1)(d) implies too many things in the legal sense and wanted to know under what circumstances can Clause 6(2)(i) happen?
Mr Kok replied that Clause 2(1) permits criteria that are flexible and they should not be limited by regulation. It is limited by interpretation of statutes and the Constitution. The classification is really relevant and the proper interpretation is that it should be looked at in the narrow sense. However it should be read wide enough for procedural and equitable considerations.
In response to Mr Lever`s question, he said that the Levies Bill is a kind of levy but not a direct tax on income and the political issue is how to determine that levy using certain criteria: the size of the company, the number of security officers employed, the gross turnover etc. Generally the levy will be determined by the gross income of the company. Mr Soman added that this is merely a yardstick.
Mr Kok said in terms of Clause 6 and 2(4) the Minister will exercise some kind of control. If there is a big bungle in determining the amount of the levy, the Minister can determine a higher levy - but this will only happen in emergency situations.
He said that Clause 2(7) provides for a yearly review of the levies by the Council. The Department of Finance has strong principles that taxes may not continue after 5 years unless it really is necessary. He said that Clause 6(2) provides that a notice may be given by the Minister, in concurrence with the Minister of Finance to reject the re-imposition of a levy.
He asserted that the clause is not merely window dressing.
Mr Soman commented that Clause 9 could be read in different ways and suggested changing it. However, Mr Kok replied that the clause was not materially a problem and it was not necessary to change it.
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