Committee Report on National Treasury and South African Revenue Service Strategic Plan 2013

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Finance Standing Committee

15 May 2013
Chairperson: Mr D van Rooyen (ANC) (Acting)
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Meeting Summary

The Committee considered its Report on the National Treasury and South African Revenue Service Strategic Plan 2013.

Members made several grammatical changes and suggested that in future pages should be numbered. The Acting Chairperson trusted that editing would be done after the meeting. A DA Member noted that the purpose of the Committee's Report was to state technical facts. An ACDP Member was not satisfied with ‘Noted that corruption had replaced crime...’ Corruption was itself a crime.

The COPE Member asked if there was a possibility to have one session a year with the Joint Standing Committee on Intelligence, when it dealt with the finances for state security. He was concerned that the Finance Committee was expected to approve a budget item for an item that it could not see. An ACDP Member suggested more cautiously that maybe it would be better to recommend that the Chairperson engage with the Chairperson of the Joint Standing Committee on Intelligence to discuss a way of dealing with the matter as security clearances were required even for Members of Parliament. Perhaps one should consider whether it was possible to separate financial issues from operational issues. An ANC Member explained that putting the state security budget under National Treasury’s budget was done deliberately as the state security budget was a highly confidential subject and [most] Members of Parliament did not have the necessary security clearance to engage in debate on the intelligence and state security operations. It was for this reason that Members of this Committee could not, unlike for other programmes of the National Treasury, obtain the details. Therefore she did not support even the idea that the Chairperson should discuss these matters with the Chairperson of the Joint Standing Committee on Intelligence. A DA Member agreed, and Members were now satisfied not to pursue the COPE Member’s suggestion.

Members made some additional recommendations. A COPE Member recommended that SARS report to the Committee on success in collecting outstanding taxes and on progress on establishing one-stop border posts. The Acting Chairperson recommended that the Committee consider the Financial and Fiscal Commission (FFC) report so as to comprehend the efficacy of National Treasury financial capacity interventions in municipalities. A DA Member recommended that National Treasury, within six months, brief the Committee on implementation of, and the costs associated with, the youth employment tax incentive, and on the trends in the cost of tax compliance for business. ANC Members thought that this latter suggestion would assist the Committee, particularly as regards concerns about investment. A DA Member recommended a briefing on the status and results of the completed and ongoing provincial interventions and that within six months SARS should brief the Committee on the process of implementing the automated tax clearance certificate. A second DA Member recommended that the Committee note the unintended consequences of the carbon tax and the effect that it might have on the economy. The implementation date should be reconsidered. An ANC Member advised that the Minister had undertaken that the National Treasury would engage with the Committee on the implementation process. A COPE Member said that it was important to keep to the timeframes, as South Africa was bound by international and could not even trade with Europe if it did not comply. The Acting Chairperson noted that the Committee would discuss the details of how the National Treasury would deal with the carbon tax when the National Treasury briefed the Committee.

The Report was adopted with amendments.
 

Meeting report

Introduction
In the absence of the Chairperson, Mr T Mufamadi (ANC), on official business, Mr D van Rooyen (ANC), the Committee's Whip, was elected to chair the meeting.

Committee Report on National Treasury and South African Revenue Service Strategic Plan 2013
The Acting Chairperson indicated that the Committee would go through the document page by page and Members could give their input where necessary.

Paragraph 1 ‘Introduction’
Members were satisfied.

Paragraph 2 ‘Mandate of the National Treasury’
Mr S Swart (ACDP) proposed inserting the word ‘use’ after ‘effective’ in the fourth bullet point.

The Acting Chairperson trusted that editing would be done after the meeting.

Members were satisfied.

Paragraph 3 ‘Policy policies for 2013/14’
Members were satisfied.

Paragraph 4 ‘The economic outlook’
Mr T Harris (DA) requested that in future pages should be numbered.

He said that the sentence ‘South Africa’s growth forecast was 2.7% this year' should be changed to National Treasury's growth forecast was 2.7% this year’.

The Acting Chairperson thought that this was in order.

Mr D Ross (DA) queried the statement that ‘SARS had over-collected in the past year by R4 billion’.

Paragraph 5 ‘Programme analysis’
Mr Harris wanted to delete the sub-paragraph beginning with ‘Furthermore, given the fact that high levels of service delivery’. This paragraph was almost ‘editorialising’ and was not relevant. Service delivery was a somewhat obscure concept in the context of the Administration Programme.

Members agreed that it must be removed.   

Mr Harris corrected the singular ‘was’ to the plural ‘were’ to agree with ‘The most significant increases in the budget for 2013/14’ in the following sub-paragraph.

The Acting Chairperson said that grammar would be corrected after the meeting.

Mr Harris said that it was important to correct grammatical mistakes as they were discovered, as the report reflected on the Committee. 

The Acting Chairperson agreed that Members should point out such mistakes.

Mr Harris wanted to delete ‘This implies that ...’ at the end of the sub-paragraph on ‘Programme 1: Administration’.

Ms Z Dlamini-Dubazana (ANC), however, wanted to be sure that the preceding sentence was retained. 

In the sub-paragraph ‘Programme 2: Economic Policy, Tax, Financial Regulation and Research’, Mr Harris wanted to delete the entire paragraph beginning ‘Whilst the need ...’ as it was clumsily written.

Members agreed.

Mr Harris said that the purpose of the Committee's Report was to state technical facts. 

Ms Z Dlamini-Dubazana (ANC) pointed out a duplication of ‘provides’ at the beginning of the sub-paragraph headed ‘Programme 3: Public Finance and Budget Management’.

Paragraph 6 ‘Programme 9: Revenue Administration’
Members were satisfied

Paragraph 7 ‘Policy Priorities for 2013/14’
Members were satisfied.

Paragraph 7.1 ‘Increased customs compliance’
Members were satisfied.

Paragraph 7.2. ‘Increased tax compliance’
Members were satisfied.

Paragraph 7.3 ‘Increased ease and fairness of doing business with SARS’
Members were satisfied.

Paragraph 7.4 ‘Increased cost effectiveness, internal efficiency and institutional respectability’
Members were satisfied.

Paragraph 8 ‘Budget analysis’
Members were satisfied.

Paragraph 9 ‘Programme Analysis’
Members were satisfied.

Paragraph 10 ‘Deliberations’
The Acting Chairperson asked if what was written was a true reflection of the Committee's engagement with National Treasury and SARS.

Mr Harris inserted ‘tax’ before ‘compliance’ in the 21st bullet point.

Mr Swart commented on the 22nd bullet point that began with ‘Noted that corruption had replaced crime...’ He pointed out that corruption was itself a crime. He presumed that what was meant was that corruption had replaced violent crime. Alternatively, corruption had replaced other crime.

Members agreed on the latter.

Mr N Koornhof (COPE) inserted ‘funded’ before ‘vacancy rate’ in the 31st bullet point.

Members agreed.

Mr Koornhof changed ‘lower’ to ‘higher’ in the 33rd bullet point.

Paragraph 11 ‘Responses by National Treasury and SARS’
Ms Dlamini-Dubazana changed ‘general’ to ‘government’ before ‘warehouses’ in the 10th bullet point.

Mr Ross commented on Economic Partnership Agreements (EPAs) in the 12th bullet point.

Mr Harris inserted ‘tax’ before ‘compliance’ in the 17th bullet point.

Paragraph 12 ‘Recommendations’
Mr Harris commented on Recommendation 12.1. It was correct to have it there but it needed to refer back to say ‘as well as SARS’.

Mr Koornhof recommended that SARS report to the Committee on success in collecting outstanding taxes.

Mr Koornhof recommended that SARS report to the Committee on progress on establishing one-stop border posts.  

Mr Koornhof said that state security (Programme 10), at R4.2 billion, was the second largest programme item. He asked if there was a possibility to have one session a year with the Joint Standing Committee on Intelligence, when it dealt with the finances for state security. He was concerned that the Finance Committee was expected to approve a budget item for an item that it could not see.

Mr Swart agreed that it was difficult to approve a budget item without seeing the figures, but to see these particular figures it was necessary to have a top security clearance. One did not want to jeopardise the operations of the security bodies. So maybe it would be better to recommend that the Chairperson engage with the Chairperson of the Joint Standing Committee on Intelligence to discuss a way of dealing with the matter as security clearances were required even for Members of Parliament. Perhaps one should consider whether it was possible to separate financial issues from operational issues. 

Mr Ross agreed with Mr Koornhof in his concern on the amount allocated, but also noted the views of Mr Swart.

The Acting Chairperson asked Mr Ross if he was aligning himself with Mr Swart, as Mr Swart was ‘very cautious’.

Mr Ross’s response was not audible.

The Acting Chairperson observed that Mr Ross’s observation was different from Mr Koornhof's. 

Ms Dlamini-Dubazana said that putting the state security budget under National Treasury’s budget was done deliberately as the state security budget was a highly confidential subject and [most] Members of Parliament did not have the necessary security clearance to engage in debate on the intelligence and state security operations. It was for this reason that Members of this Committee could not, unlike for other programmes of the National Treasury, obtain the details. Therefore she did not support even the idea that the Chairperson should discuss these matters with the Chairperson of the Joint Standing Committee on Intelligence.   

Mr Harris agreed with Ms Dlamini-Dubazana.

Members were now satisfied.

The Acting Chairperson recommended that the Committee consider the Financial and Fiscal Commission (FFC) report so as to comprehend the efficacy of National Treasury financial capacity interventions in municipalities as outlined in National Treasury's Programme 3.

Mr Ross added that there should be a reference to supply chain management objectives.

Mr Harris recommended that National Treasury, within six months, brief the Committee on implementation of, and the costs associated with, the youth employment tax incentive.

Ms Dlamini-Dubazana asked if National Treasury had mentioned this in the budget allocation.

The Acting Chairperson confirmed that National Treasury had mentioned it, under tax and investment incentives.

Ms Dlamini-Dubazana was now satisfied.

Mr Harris recommended that SARS brief the Committee on the trends in the cost of tax compliance for business.

The Acting Chairperson thought that this suggestion would assist the Committee, particularly as regards concerns about investment.

Ms Dlamini-Dubazana added her support.

Mr Harris recommended a briefing on the status and results of the completed and ongoing provincial interventions.

The Acting Chairperson agreed.

Mr Harris recommended that within six months SARS should brief the Committee on the process of implementing the automated tax clearance certificate.

Mr Ross recommended that the Committee noted the unintended consequences of the carbon tax and the effect that it might have on the economy. The implementation date should be reconsidered.

Ms Dlamini-Dubazana advised that the Minister had undertaken that the National Treasury would engage with the Committee on the implementation process.

Mr Koornhof said that it was important to keep to the timeframes, as South Africa was, in terms of Africa, the highest polluter on the continent and was bound by international treaties to take action and could not even trade with Europe if it did not comply, for example, with regulations for motor cars.

The Acting Chairperson noted that the Committee would discuss the details of how the National Treasury would deal with the carbon tax when the National Treasury briefed the Committee.

National Treasury and South African Revenue Service Strategic Plan 2013: Committee’s Report – adoption
Mr Koornhof proposed adoption, with amendments.

Ms Dlamini-Dubazana seconded.

The Report was thus adopted with amendments.                    

 

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