Tourism season, expansion plans for CIA, tourism, remote working and e-visas: stakeholder engagement

Meeting report

The Chairperson welcomed Members to the "post mortem" of the tourism season for the province in the previous financial year, and for a look into the challenges that needed to be addressed, such as visa backlogs. There would be presentations from the Department of Economic Development and Tourism (DEDAT), the Airports Company South Africa (ACSA), the Department of Transport (DoT), the Department of Home Affairs (DHA) and the South African Revenue Service (SARS).

Department of Economic Development and Tourism and Wesgro presentation

Mr Velile Dube, Head of Department: Department of Economic Development and Tourism, said that there had been a remarkable recovery during the past tourism season as international arrivals were at pre-COVID-19 levels and domestic recovery was at 75%, which could have been higher but for limited airlift and aircraft capacities. Profitability had also increased, mostly in the short-stay accommodation sector, and the Department’s summer season readiness plan was successfully implemented.

Mr Jacques Stoltz, Director: Tourism, DEDAT, said that the Department was impressed with the improvements in the industry in the last few months. The City had prioritised its efforts on tourism safety to ensure that travellers were safe while in the province. There was increased security visibility in the City Bowl, which did a sterling job in patrolling key hotspots with the support of cadets from the Department of Community Safety. The Department hosted successful events without major incidents being reported. The Department participated in various safety activations that provided visitors safety tips and resources.

Some unfortunate events included the disappearance of the German tourist Nick Frishka, which highlighted the challenges of tourism safety. The Department would conduct a tourism safety survey to help guide the Department in understanding how the industry had experienced safety in the last six months.

There was a challenge of the delay in issuing tourist transport operating licences by the Department of Transport, which resulted in vehicles being impounded and international tourists being left on the side of the road while travelling.

Cape Town International Airport and George Airport traveller numbers were back to pre-COVID levels and there was no travel disruption compared to the northern hemisphere. There were some sporadic instances of long queues at the e-gates due to downtime of the interface of the system. Both airports require urgent infrastructure upgrades to keep pace with rising travelling demands.

At the Cape Town Cruise Terminal, no significant complaints were raised by cruise operators. However, there were challenges at the ports when more than one cruise ship needed to cross over.

The Department found through its research that there was a skills shortage, with 42% of the industry struggling to fill key vacancies such as kitchen staff, foreign language and tour guides and front-of-house staff, in the last six months. There was also concern that the expiry of the Zimbabwe Exemption Permits (ZEPs) would exacerbate this. Despite this, 245 learners were employed throughout the industry and there was a revitalised tourism skills forum with TVET colleges.

There had been a need to communicate with domestic audiences, as most advertising had been geared towards the international market. A month-long social media campaign on safety tips to domestic travellers, and those visiting the province from 13 December to 13 January, had four million impressions across all platforms. The campaign would be extended in the upcoming summer season.

Research is currently being done on the reform of e-visas, particularly remote working visas. Visa webinar series was being held to highlight international best practices. Discussions were under way with the Department of Higher Education and Training (DHET) about the critical skills visa to address the skills shortage. There also needed to be an amended approach to e-visas to handle the high demand for visitor visas. A high percentage of e-visas were declined, so there would be discussions with the Department of Home Affairs (DHA) to determine why and how to improve this.

Ms Monika Luel, Chief Marketing Officer, Wesgro, said that the Western Cape received an estimated R14.4 billion of direct foreign spending. The UK was the country’s top source of visitors, followed by Germany, the USA, the Netherlands and France. There had been increased international travel to pre-COVID levels, with a full recovery expected over the next few months as there was a further campaign to encourage domestic and international travel.

The domestic market was a key market that Wesgro focused on, as it wanted to encourage South African travellers to visit and return to the Western Cape as part of their holiday plans. Partnerships had been formed with local entities to encourage this market, which had been a success. In addition to this, the continent was also an important market. Wesgro had partnered with SA Tourism to engage and support this market, and travel agents from the continent, particularly East and West Africa, had come to the province for a full-day experience. It had also partnered with them to attend the Africa Chapter Meeting at Meetings Africa.

Wesgro ensures that communities and small businesses benefit from the work it does. An example of this was the 21 cruise tourism agents in Langa, who showcased community activities and events where they could tell their stories.

Ms Jean Scheltema, Chief Marketing Communications Officer, Wesgro, said that the organisation was actively focused on being the first movers in the tourism sector, thus pioneering innovation for the sector. An example of this was the Never Ending Tourist campaign of 3.3 million YouTube views, which won numerous awards, such as gold at the CIFFT tourism film festival in Japan, and silver at the New York festival, which put Cape Town on the global stage. The campaign was the first search result when searching for Cape Town.

Wesgro had developed the Climb Table Mountain Metaverse initiative effort in response to research which had found that youth audiences influence their parents to take them on a trip. So far, the initiative had over nine million views and 45 000 clicks. It has also attracted domestic and global markets from the US, UK, Germany, Brazil, Mexico and Japan. It was the first time a tourism asset was built in the meta-universe via Roblox. Fauna and flora had been added to reflect the integrity of the mountain.

Starlight Adventures in The Cape Karoo was also a meta-universe initiative, where the town of Prince Albert had been built and launched. It explored astro tourism, culture and heritage and ghost stories of the town. Four museum curators in the region were commissioned, and discussions with local tour guides were held to ensure they were incorporated into the town’s digitisation. Wesgro had partnered with Wimpy on this project, as it was a much-loved brand, and to capitalise on the road trip market to encourage the domestic market to drive into different areas of the province.

Regarding connectivity, there was a full recovery of international passenger numbers partly due to the Cape Town Air Access team, which was a public-private ecosystem powered by Wesgro that works on landing direct flights to Cape Town. Domestically, there was a 35% loss due to three airlines going offline. It was hoped that new airlines and services would enter the market to balance passenger numbers.

Ms Luel said that Cruise Cape Town was a public-private partnership also powered by Wesgro to drive the growth of the cruise market into Cape Town. There was a carrying capacity of 300 000 passengers annually, considering this was a new market for the province. The province was currently receiving half of this, and efforts were being made to increase this in the upcoming cruising season. The cruise season for Africa was between October and May, when international cruise lines looked for alternative routes and destinations, as it was winter internationally, and this was something which Cape Town and South Africa benefited from. From an economic perspective, Wesgro encourages world cruises and international coastal cruises to visit Cape shores due to turnaround calls, where new passengers were frequently circulating the cruises and would most likely spend a significant amount of time in the province and country. There were 56 ship visits planned for this year, with 33 turnaround calls, which would have a strong economic impact on the province.

The International Cruise Lines Association was pushing for the industry to become carbon-zero by 2050, impacting the infrastructure and logistics needed for such a transition. There was also the economic potential of expedition ships, which were smaller ships that could stop at places like Hermanus for travellers who would like to see niche markets.

It was also the first time that the port of Mossel Bay had been able to have a cruise line enter the port, as it was usually tender boats that entered. The port now had port of entry status as of 1 November 2022, which enabled immigration and customs services.

See attached for full presentation

Discussion
 
Ms L Maseko (DA) wanted to find out what metrics the Department and Wegro use to track which municipalities tourists visit regularly. What other municipalities were frequently visited besides the Karoo? What was it that tourists wanted to see in these areas? What was the relationship with municipalities in ensuring that municipal services were aligned with the efforts of the Department and Wesgro?

How did the Department and Wesgro engage with e-hailing services by verifying their drivers to try and ensure no incidents took place on trips, as this would impact the image of the province and the country?

Mr A Van der Westhuizen (DA) asked about the status of Air Access in getting direct flights to South Africa. Had most flights returned, or were outstanding challenges still needed to be addressed?

Cruise ships run on a tight schedule in getting to and out of South African ports. What challenges had this been in the sector, and how was the Department overcoming this?

There were concerns about the pre-selection process of tourism officers who get trained, as the best people who were not selected, which caused issues down the line. Could the Department take the Committee into its confidence that this was being addressed, and that the right people would benefit from the training?  

Mr L Mvimbi (ANC) asked whether the Department had successfully got direct flights from the USA to Cape Town, and vice versa.

There had been a huge environmental outcry about cruise liners causing harm to marine biology and surrounding ecosystems. Smaller towns such as Knysna and Plettenberg Bay had argued that while they would like to have their own port, they were concerned about the harm to marine life. How was the Department addressing this, and were they helping smaller towns to have their own ports?

Regarding work done in Port Alfred, was the Department partnering with the known Wimpy brand and if so, why specifically them and not any other fast food chain operator? Were there any black-operated tour guides?

Mr I Sileku (DA) asked what steps the Department was taking to address long queues at e-Gates, as the DHA would take a while to provide additional personnel as a staffing moratorium had been imposed.

With the expiry of the ZEP likely exacerbating the skills shortage in the sector, what was the sector doing to ensure sufficient people with skills to arrest the possible skill decline?

In terms of local government, was there a particular structure that Wesgro was engaging within the different municipalities so that they were able to market different destinations within them?

The Chairperson asked if the Department was conducting broader surveys to pre-identify emerging markets coming to South Africa from the airports and cruise liners and to understand tourism trends in the country. This was done in other tourism markets and there was uncertainty about whether South Africa had the same structure.

Were visa backlogs the cause for a less significant tourism season, and was it expected to stunt future seasons?

What work had been done with the red tape reduction unit to address visa backlogs, as they had dealt with visa-related issues in the past?

Due to time constraints, the Chairperson asked that any remaining questions that the Committee had should be submitted in writing.

Responses

Ms Ise van Schalkwyk, Chief Director: Economic Sector Support, DEDAT, said that the Department had conducted research three years ago to establish each district and municipality's unique selling points and where and how to market them. For example, Drakenstein had an emerging sports tourism market that encouraged people to visit, so the Department helped to support it by highlighting this so that visitors could extend their stay in the region. District analysis of all six districts would be shared with the Committee.

Concerning the training of tourism officers, it was acknowledged that there were concerns about safety surrounding transportation in the province. Mr Stoltz said that two types of training would occur this year -- the first was for front-line staff, which the Department would include e-hailing personnel, and the other training was for the tourism safety trend, which aimed to help front-line staff respond to incidents.

Ms Luel said that the seating capacity of the route network had improved to 120%, which was an improvement from pre-COVID levels. There were some unserved markets which the team was working on, these being direct flights from Cape Town to Brazil, Australia, India and West Africa. The team would like airlines to return to year-round flying, as it was currently seasonal.

The cruise season intersected with the highest month of citrus exports, so the ports had limited space to share between the ships and cruises. The Department and Wesgro knew when the cruises and ships would be arriving for the upcoming season, which allowed them to receive pre-clearance and time allocations of when they could enter the ports. The Transnet National Ports Authority (TNPA) and South African Marine Safety Association (SAMSA) met with the Department to manage the constraints, and the relationship was healthy with proactive commitments to ensuring the constraints were progressively addressed.

The cruise industry takes responsibility for its impact on the environment very seriously. The industry had to adhere to a series of protocols and interventions to ensure minimal impact. There was a recent engagement in Hermanus where residents and stakeholders raised environmental concerns, particularly about the Silversea cruises, and these concerns had been allayed. There was a technical document that could be shared with Members on how the industry ensures it adheres to its commitments.

Wesgro actively works with local and regional tourism municipal offices, as they meet quarterly and were provided with a pavilion at Africa Travel Indaba (Durban), World Travel Market (Cape Town) and Meetings Africa (Johannesburg). It was important that these offices get support from Wegro, as they were able to identify what the tourist spots were that Wesgro could support them with.

Ms Scheltema said that all considerations had been considered when representing the Karoo digitally. The Department had worked with Karoo-based anthropologists to represent the life of the region, as well as preserve the San's history. It was important to bring people along, as it would have much impact and when tourists visit, they would know what to expect. The Department had worked with Barbara Kirkman from the Central Karoo District Municipality, and Sue Milton Dean and other well-known people in Prince Albert to bring the story to life.

It was indeed Wimpy that was being partnered with. It was about scale and the shortest route to the largest market that Wesgro was trying to reach. Wimpy was an entrenched road trip brand with a large distribution network that Wesgro wanted to reach, especially with a small budget. It was also a Proudly South African brand which would reach the hearts and minds of the audience Wesgro was trying to capture to visit the Karoo region.

Mr Stoltz said that Wesgro worked with local municipalities and tourism offices to identify training beneficiaries, as they had good relationships with communities and those keen to pursue a career in tourism. Additionally, it had gone into areas where there were reports of illegal guides. It engaged with them to become legal, which in turn supported them as they were already in the industry. Wesgro also worked with associations such as the Federated Hospitality Association of Southern Africa (FEDASA) to recruit some of their members to be training beneficiaries.

Regarding the racial composition of tour guides, an analysis would be done to assess this and report back to the Committee.

Regarding the ZEP, Wesgro had started a skills forum to understand what skills were needed in the industry, and to place young learners completing their studies with prospective employers. It was working on a skills plan to find the gaps in the industry and working closely with the Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority (CATHSSETA) to address the critical skills shortages.

Wesgro had access to raw data from the South African Tourism exit survey, which could provide analysis and perceptions of visitors when they leave the Cape. It also sends surveys regularly to the industry to assess what key trends are arising. It was also able to understand niche tourism markets such as educational tourism, or better understand existing trends such as safety trends.

Ms Luel said that Wesgro had made technical and vocational education and training (TVET) college learners available to support the ACSA with managing the e-Gates due to staff shortages as part of the summer readiness campaign, to release pressure from the service side. Still, ongoing challenges affected ACSA, especially now that the recruitment moratorium has been lifted. This had to be addressed as long queues at the gates could not continue to be the case.

Evidence showed that the backlog of visa applications and visa reform had had an impact, as the barrier to entry impacted the number of tourists that entered the country. As such, the province competed with other destinations where it was easy to enter the country. There were lots of growth opportunities but there needed to be an easing of regulation that made it easier for people to enter and stay in the destination for as long as possible.

Establishing smaller ports in Knysna and Plettenberg Bay had to do with maritime safety. The Department had partnered and worked closely with Silversea in the last year on a new itinerary which would come to the Western Cape in 2025, stopping at Langebaan and Hermanus. In the course of their analysis, they found that the sea conditions at Knysna and Plettenberg were not feasible for cruise liners to drop anchor, nor to use their tender boats safely.

Mr Dube said that in discussion with the TNPA, it had been found that larger tug boats go a long way in mitigating high and long waves. When vessels were docked at the cruise or multi-purpose terminals, they were shielded from the wind better than the container terminal, as it made it difficult to handle cargo. Due to this, more tug boats and helicopters were being installed to drop pilots into the piloting ships at the harbour.

Airport Company South Africa Presentation

Mr Mark Maclean, Regional General Manager, Cape Town International Airport, said that the official peak season was from October to March, but some airlines were extending to early May as more events occurred in the province, indicating positive and continuous growth in the Cape. The socio-economic impact amounted to a R1.2 bn contribution to gross domestic product (GDP) during this season, and the creation of 2 200 jobs.

There was a 100% international passenger recovery in February 2023, compared to 2019. Two new airlines operated in the province, and there were six new or expanded air routes. The airport has won various awards, the highlight being the Best Airport in Africa and Cleanest Airport in Africa.

Some of the lowlights were the fuel shortages in November 2022 and January 2023, leading to a United Airlines flight being cancelled. However, by January 2023, all flights were able to operate despite the shortage. There was a severe staff shortage on 25 March 2023, where only one official was processing passengers, leading to eight flight delays of 44 minutes. On 15 April 2023, the airport lost its runway visual range indicator, leading to the downgrading of the instrument landing system to category one, which meant a visual range of 550 meters and above. On the same day, there was a dense fog experience, which led to the visibility being reduced to under 300 meters and to a 1.5-hour delay for domestic flights, and an international flight was diverted.

The airport had achieved all its key performance indicators which were dependent on whether a flight departed on time from the airport, which was currently at 88%. It would have been higher if there were more international arrivals, due to poor weather in Europe. Passenger processing times were also considered, where the industry standard was 35 minutes for domestic flights and 55 minutes for international flights. The airport achieved 28 minutes and 42 minutes, respectively. In terms of passenger satisfaction, the airport achieved a 4.1/5 rating.

From April 2022 to March 2023, there was an increase in passenger volumes, with March recording the highest growth since the removal of COVID-19 restrictions. Overall domestic travel volumes were at 75%, whereas international was at 91%, which averaged a combined total of 79%. This would have been higher if ComAir was still in service, as they took a substantial chunk of the market. Despite this, some routes had seen good demand for air travel, and the existing airlines were bringing additional flights into service.

George Airport had seen a 92% recovery in passenger volumes, largely due to domestic passengers. This would have been higher if not for a lower December recovery, which saw a dip to 65%. Usually, the airport experienced a higher passenger mileage, but due to higher ticket prices, passengers preferred road trips.

The e-Gates tended to be slow and sometimes could not read fingerprint information timeously. It should be noted that only South African passport holders were allowed through the gates. There were engagements with the DHA to improve the interface, as it was planned for the gates to be installed at other airports and to allow international travellers to use the gates once this had been resolved.

The current focus of the airport was on increasing the number of permanent immigration officials with the DHA to achieve consistent passenger service levels in the inner and outer parts of the airport. This was a preventative measure against a land invasion on the eastern side of the airport, which would be used for future air projects. There were current talks with the Department of Public Works and Infrastructure (DPWI) to assist with moving the invaders away from the land, all while ensuring a consistent fuel supply to prevent a fuel shortage and allow planning for the 2023/24 peak season.

See attached for full presentation

Discussion

Mr van Der Westhuizen asked if there had been an incident that had led to having only one runway and whether an investigation by the Civil Aviation Authority (CAA) was warranted which likely meant that flights would now have to be diverted due to the lack of the second runway.

What had been the design capacity of Cape Town International Airport and George Airport? Was there room for growth, and by how much could such growth occur?

Mr Sileku asked if this was the first time that the airport had experienced a fuel shortage, and how much money was lost during this time.

Regarding long queues at the e-Gates, what other measures were in place to avoid these queues inconveniencing passengers? Waiting on the DHA may take time for a solution to be found, so alternative measures were required. Were there any discussions with the Department, and were there indications that there would be personnel in the future?

The Chairperson wanted to find out if there would be an expansion of the George Airport, and if a plan had had been submitted to the economic regulator for consideration in September.

What engagement was happening with the DHA to address the interface issues which resulted in long queues at the e-Gates? Had the airport engaged with other countries on their e–Gate best practices?

ACSA's responses

Mr Maclean said that two runways operated, with the main one being 3.2 kilometres long which could be used for domestic and international flights, and the secondary one being 1.7 kilometres long, which could be used for domestic flights. The main runway had a landing system which allowed aircraft to land in bad weather and the second one had a visual approach system that allowed landings only in good weather. When the main runway was out of service in bad weather or an international flight was inbound, it did create an issue. There had been significant investments in aircraft recovery capability through the ability to handle faults and make quick repairs to aircraft.

Cape Town International Airport had a declared capacity of 15 million passengers. However, there were parts of it that were nearing, or had reached capacity, especially in the international aspects, which were being addressed. There was also a need to make some expansions on the domestic aspect, as well as runways, which were mostly driven by air traffic movements which would inform the expansion.

George Airport had approved its expansion plan, especially on the main terminal. The plans were meant to have been executed in 2020, but were delayed by the pandemic.

The airport had previously experienced fuel shortages for various reasons, so there was a plan to prevent disruption when the airport was aware of such shortages. When the fuel supply was low, immediate notice was sent to airlines and rationing was immediately applied so that flights were not cancelled.

As the Department of Home Affairs moved forward with the Border Management Authority, there was an understanding that there would be a pool of resources from various entities, and discussions were currently underway to prepare for the upcoming peak season. ACSA had employed its own learners to assist at the e-Gates. In 2019, in partnership with the DHA, there was investment in having more staff during the peak season which was successful, with 30 learners being added. This would be discussed with the DHA to resolve the staffing limitations.

When the e-Gates were not in operation, it was normally due to a breakdown in the information technology (IT) interfaces between the DHA and the ACSA, where the DHA database was not clearing travellers or the system became extremely slow, which then became unreliable. ACSA’s IT team was working on an improved interface with the DHA which would take at least a year to implement it, which was why this financial year’s peak season required additional resources while the improvements took place.

Follow-up discussion

Mr van Der Westhuizen asked how competitive ACSA’s landing fees were compared to international practices, and how they may affect flight prices.

Were there any plans to improve the security of carousels so travellers took the correct luggage, to avoid someone’s luggage being taken by mistake?

The Chairperson asked if the ICT improvements were the responsibility of ACSA and if so, what was the reason behind the year-long delay?

How would the Border Management Authority help alleviate the congestion experienced at customs points?

Follow-up responses

Mr Maclean said that the International Air Transport Association (IATA) had identified a programme called "Bag Track," where passengers could use radio frequency identification (RFID), which was a unique tag linked to trace their bags. ACSA was looking to implement this in the future. At present, the taking of incorrect luggage is not a significant concern for the airport.

ACSA functioned as part of the interface system, where they checked for the validity of tickets. The DHA was responsible for ensuring that passports were valid, opening the first gate. At the second gate, passengers must identify themselves via fingerprints, verified by the DHA, which opens the second gate. Both IT teams were working on ensuring that the interface between both systems was optimised to clear passengers within seconds. The system had been bench-marked according to international standards, but it was acknowledged that improvements, especially on the DHA side, were urgently required.

Regarding landing fees, IATA assists the industry in determining a fee structure to ensure that the airport is optimised and in line with industry best practices. Prior to COVID, the ACSA had reduced the tariffs by 35%, and was now slightly increasing due to inflation. The permission process would determine the tariffs for the next five years.

Department of Home Affairs presentation

Mr N Ryan, Acting Chief Director: Permitting, DHA , presenting on behalf of Mr Yusuf Simons, Acting Deputy-Director General: Immigration Services, said that the Border Management Act (BMA) of 2020 had now replaced all border management legislation and governed all border entry points as of 1 April 2023. Efforts and resources were being put in place to ensure enough staff at various supporting agencies that enforced the Act. A biometric control system had been implemented to uniquely identify each traveller entering and departing the country. Full-scale implementation had not yet happened, as the Department wanted to assess what challenges the system may experience and how these should be resolved.

There were interface and network issues that needed to be resolved in the facilitation of self-service immigration support at e-Gates. The technical support system in the Department was looking into this to ensure smooth ease of border entry.

Another challenge the Department faced was the smuggling of persons. There had been a worrying trend of Bangladeshi and Pakistani nationals being smuggled into the country, especially through Cape Town International Airport. What had also been noticed was that some of these nationals, without their knowledge, would be in the process of claiming asylum with the assistance of certain lawyers.

After COVID-19 restrictions were lifted, there had been an increase in tourism in the country. OR Tambo International Airport and Cape Town International Airport recorded the highest number of tourists entering the country. The movement statistics have been shared with Stats SA and the Tourism Satellite Account. This data needed to be handled with care, as some tourists claimed to be coming to the country as tourists but ended up becoming illegal foreigners, and some became asylum seekers.

The e-Visa system had been implemented to help boost the efficiency of the visa process, which in turn helped with the tourism industry. So far, 20 countries qualified to apply for e-Visas to South Africa. Since its roll-out, over 12 000 applications have been processed. A specialised hub had been established with 18 adjudicators considering and processing applications. The system was being upgraded to include and streamline business, study, and company visas. A testing phase was underway to see how these visas would work on the system and could be offered to tourists.

The Department was now working on an implementation plan for remote working visas, as recommended in the Vulindlela Report from the Presidency. This report also included recommendations for startup company visas. These new visas would be included in the revised immigration regulations to be published by the end of June 2023, subject to the State Attorney's advisors and public consultations.

Visa exemptions were always considered, but this was dependent on relations between countries. This was mostly dependent on reciprocity, where exceptions applied equally to the countries in question, such as 30-day entry exemptions. Factors that South Africa took into consideration were the number of visitors from a particular country visiting the country over a three-year period, the number of asylum seekers received, as well as the number of nationals deported, and lastly a security analysis done by the State Security Agency (SSA). South Africa had exempted most countries and was working hard on getting them to do the same for South Africa.

See attached for full presentation

Discussion

Mr van Der Westhuizen asked if including the e-visa system to include more countries meant that the system was a success in terms of having effective immigration services.

There seemed to be a problem with Department's staff at the Cape Town International Airport. Was the Department aware of this, and how did it manage with officials who may be required to work outside of normal office hours?

Mr Mvimbi asked if there had been an investigation regarding advocates who may be submitting asylum applications on behalf of unsuspecting Bangladeshi and Pakistani nationals.

Regarding the issuing of visas, it had been alleged that this was being privatised to Visa Facilitation Services (VFS) Global, which had allegedly led to a backlog in visa processing and issuing. Was this true, and why was such a public service being privatised? Were e-visa also being issued by VFS Global?

Mr Sileku asked if the Department would be able to meet its targets for its remote working visa plan. If not, what would be the hindrance to doing so?

The Border Management Authority has been in place since 1 April 2023. Would it be able to provide more capacity to Cape Town International Airport, as there had been complaints of long queues?

There have been reports of complaints about issues surrounding the Biometric Movement Control System (BMCS) system and the e-Gates at the airports. Would the Department be willing to move to facial recognition, rather than fingerprint identification, to identify a traveller?

The Chairperson said that the Department’s aim of achieving its implementation plan on legislative reform in three months was ambitious. What steps had already been taken during the process, and did the Department believe it would be able to ensure the plan’s success in the stipulated time?

It had been stated that the upgrading and implementing information communication technology (ICT) infrastructure, especially on e-Gates, would be delayed by another year. What were the contributing factors to this delay? Was it a budgetary matter, a skills shortage or the tender process? There had been a moratorium on appointing additional staff - had it been lifted?

DHA's response

Mr Ryan said that the e-Visa system was fully functional and no issues had been raised to date. The next phase would be to add additional countries to the programme, as well as to add additional visa options. Should there be issues experienced with this process, the Department plans to resolve them.

When there were staff shortages at Cape Town International Airport during peak periods, such as the festive season or Easter, the Department deployed additional staff or gave them the opportunity to work overtime in accordance with the laws of the Department of Public Service and Administration (DPSA), which states that officials cannot work more than 34 hours a month in overtime.

There had been an investigation into the submission of applications for asylum by unsuspecting Bangladeshi and Pakistani nationals. Part of the investigation was to find the lawyers and see if a syndicate was being run by them and the nationals in question.

VFS Global had no bearing on the e-Visa process. The e-Visa process was developed by the DHA and the South African Revenue Service (SARS) which was more robust and able to handle large amounts of data. As such, the Department would not outsource it to VFS or any private entity.

Regarding the backlog of visas, VFS only collects applications and uploads them onto the Department’s system. The backlog rests with the DHA and not VFS, which this was currently being addressed.

The legislative reform process was currently underway. So far, it was still on target to finalise the plan by the end of June.

With the implementation of the BMA, there was an operational plan on managing long queues at the Cape Town International Airport during peak periods. The Department would deploy additional staff to provide support during these times.

The BMCS system was not the same as the e-Gate system. The BMCS focuses on biometrical recognition, where there were interactions with officials to ensure the system runs effectively, whereas the e-Gate had no such interaction. When there were challenges regarding the e-Gate, it had to be established and documented if a human or network-related issue needed to be resolved. The two systems had no impact on each other.

The incorporation of facial recognition into security measures was being considered. A team of IT specialists from the DHA, the ACSA and other stakeholders were having discussions about this and would be able to provide feedback about this at a later stage.

There were no delays to the ICT infrastructure pertaining to the BMCS system, as the Department controlled it. The e-Gates. However, involved a collaboration between the Department and the ACSA. Further information would be provided in writing via email.

Regarding the staff moratorium, that would be a decision of the Border Management Authority now that it had come into effect. The Department would engage with the BMA team to determine their plans for appointments at the Cape Town International Airport.

Follow-up discussion

Mr Mvimbi wanted to find out if applicants who had applied for visas via VFS would be able to make an application via the e-Visa system. There was confusion among applicants when they enquired about their applications from VFS, as they were directed to the Department but would then be re-directed back to VFS.

Mr Sileku asked what impact the 18 e-Visa hubs had had since their establishment. A constituent had sent an inquiry for a visa, and was still waiting for a response three months later. The turnaround time was slow in instances like this. How was the e-Visa hub alleviating this?

When it came to the challenges of using the e-Gates, would the Department be confident in saying that they had no issues with their ICT systems, but rather that it was a network issue?

Mr Van der Westhuizen wanted to find out if e-Visa applications were being processed manually and if so, whether there were delays in processing and issuing such visas.

The Chairperson wanted to find out when individuals would be able to apply for remote working visas and how they would go about doing so.

What was the current backlog in terms of tourism, spousal and work visas, and how did this compare against the deadlines that the Department had set for itself? How many of these applications did the Department receive?

Follow-up responses

Responding to the e-Visa backlog, the Department said a specialised operating management team within the permitting environment had been appointed to resolve most of the backlogs. The turnaround time of three months was a concern. The 18 adjudicators had started in April, with more adjudicators being added as time progressed. When the visa application process became fully online, adjudicators from previous visa processes would be integrated into the new system and would adjudicate online.

The opening of applications for remote as well as other planned visas would be announced in due course. The Department would release a statement once the system had been finalised.

It could not be guaranteed that no challenges would arise with the ICT system. Where challenges arise, their cause would have to be looked into. For example, the e-Gate runs through two systems -- one by the Department, and another by the ACSA. A fault could be found on either system which needed to be resolved. Cape Town International Airport had had no challenges with the Department’s systems. The networks at all the airports had been very stable, but challenges may arise along the way.

Mr Simons said that the e-Visa system had simplified how short-term visas could be applied for and issued where applications were made electronically. The application outcome could be determined in a short period and emailed to the applicant. The addition of 18 adjudicators would significantly impact ensuring there was a quick turnaround time, and applicants would not need to go to an embassy to submit their applications or collect their visas.

The remote working visa would be added to the online platform and would be announced in due course once the system had been further developed.

There were ICT challenges, particularly with no integration between the systems. The e-Visa system was updated only recently, with 38 enhancements to ensure its efficiency. There were challenges, but the DHA recognised that it was an information-orientated Department and had to see that all its systems were speedily addressed. This was a topical issue with the top officials of the Department.

The visas experiencing a significant backlog were the relative and spousal visas, currently sitting at 54 500 applications. Of these, 30 000 were spousal applications for permanent residency holders or South Africans. Previously, just after opening applications after COVID-19, 97 000 applications had been received in one year. Usually, the Department received 45 000 applications, except during COVID, which had been less due to the Department’s closure. In that instance, however, concessions had been issued, such as permission to remain and travel into and out of the country while applications were considered. 62 adjudicators throughout the country were being brought on board from 1 July 2023 to handle this backlog and had been trained by the Department. There was a backlog in permanent residency applications which were scheduled to be cleared by June 2024, and temporary residency applications by the end of this financial year. There was no backlog for work, business, and critical skills visas.

South African Revenue Services (SARS) presentation

Mr Edward Kieswetter, SARS Commissioner, said that four years ago, the organisation had been in a dire state due to a deliberate intent to render it ineffective and thus be unable to collect sufficient revenue. In 2023, SARS was able to collect R2 trillion in revenue for the first time due to rebuilding efforts. Additionally, SARS has been able to fast-track refunds to taxpayers, as well as increase tax compliance. Public trust in the entity and customers’ experience with engaging with them had increased. SARS’s 2024 vision was to become an organisation of integrity that the public could trust to voluntarily comply with tax legislation while balancing two variables -- firstly, making it clear and easy for taxpayers to comply and secondly, managing risk to the fiscus. The Western Cape contributed 15% to the national revenue collection, and had a higher tax compliance rate than the rest of the country.

SARS had introduced the South African Traveler Management System, which formed part of its modernisation framework, which included building smart borders by creating a pre-clearing system that would have goods and cash cleared when one reached the border unless there was a risk detected. This would support existing legislation requiring travellers to make declarations when entering South Africa. Previously, it would be a paper-based involuntary declaration, but the system would now allow for electronic declaration and would soon be a mandatory requirement to make a declaration once the tax legislation has been amended. The system had been piloted at King Shaka International Airport in Durban. It would be tested at all international airports and all land and sea border ports in the next calendar year. SARS would invest in a marketing drive to educate the public about the system. To date, 42 000 people have made use of the system.

SARS was working on how to receive tax for remote work, especially for people who had remote working visas. South Africa had a resident-based tax system where, if one was a tax resident of South Africa, one would pay tax to the country regardless of the source of income. Non-tax residents of South Africa become obligated to pay tax, provided their source of income comes from South Africa. The exception was if one worked less than 183 days in a 12-month yearly cycle, not receiving remuneration from a South African employer or a permanent establishment in the country. SARS would implement a system of real-time declaration that would source information from trusted third-party sources, decreasing reliance on retrospective and future personal tax declarations.

See attached for full presentation

Discussion

Mr van Der Westhuizen asked how employers who had employees who worked in various parts of the world declared the number of days they had worked and the period they were in and earning in South Africa. Similarly, would SARS be able to track income potentially earned in the country by people working for foreign countries in South Africa?

Mr Sileku asked how SARS dealt with employees without documentation to prove they had right-to-work status in the country, thus not being registered as provisional taxpayers. How was SARS ensuring customs enforcement since the introduction of the BMA on 1 April at the borders?

Could SARS elaborate on the tax timeframes of foreign employees having to pay provisional tax in August, and February of the following year?

The Chairperson asked if the tax declaration applied to both South African and foreign employees and in the case of South African employees, if they would need to declare twice when leaving and returning to the country. Were such declarations done in other parts of the world and if so, what had been the benefits, and would they materialise for South Africa?

Regarding the SARS’s role in the BMA, would it be used for people visiting South Africa to claim the VAT they had spent, instead of saving the receipts and making a claim at the airports?

SARS's response

Mr Kieswetter said that it did not matter whether one was a South African tax resident -- if the employer was based in South Africa, and their employees were working in different parts of the world, the employer must administer the payroll taxes and make a submission to SARS.

Illegal employees imposed a challenge for SARS. It had active campaigns to ensure that prospective employers had to register their employees as provisional taxpayers.

There had been a suggestion that the BMA should have customs and collections powers, but this was not agreed to as industry best practices around the world showed that customs and trade facilitation were separate functions from border management enforcement. SARS and border management agents had clear legislative principles on which they were founded with their respective functions, and where they had operations protocols.

For South African employees who had more than one source of income, they should make a self-assessment of how much they owed in taxes and make provisional payments every six months so that when a final assessment was made, SARS could decide how much they had left to pay or if they had fulfilled their tax obligations. This was in law to allow people to make self-assessments before SARS made a final assessment.

All travellers arriving and departing South Africa must make declarations whenever they have goods and excess cash above the approved threshold. By way of example, if one brought a laptop into South Africa, one must provide a serial number and declare the cash amount involved so that if SARS asks about it, one would be able to prove that one bought it in South Africa without needing to pay customs duty on it.

Global practices varied, but it came to the same point that certain items were prohibited for custom purposes because they were illegal and may be returned by the country. Customs duties were charged to protect domestic economies and local distribution, so there was a disincentive to buy offshore if it was already available onshore. South Africa applied this through the Traveller Manifest, where SARS already knew who was already landing in the country and applied the various custom checks. SARS aimed to move towards a passenger name record which would provide a profile of the taxpayer's travelling history, which would help determine their risk before landing in the country and whether further investigation was required.

SARS would consider the suggestion regarding VAT refunds for travellers.

Mr Franz Tomasek, Head: Legislative Policy, Tax, Customs and Excise, said one paid tax on income from one's worldwide income, but there was an exception for salary income earned offshore where employers had to use particular codes for this to take effect. If a person had more than one offshore employer, they would be provisional taxpayers who would follow the two six-month periods of paying provisional tax before the final assessment, where they could see if they still owed tax. This allowed independent workers to have equal footing as salaried employers who paid their taxes monthly and did not pay at the end of the tax year.

Mr Beyers Theron, Head: Customs - Border Operations, Port Entry and Customs, referred to the BMA, and said the relationship between SARS, the DHA and the South African Police Service (SAPS) would be closely aligned, as the new agency had been created to effectively manage all the necessary units responsible for the country’s border management. Working groups had been established to establish governance, legal, operations, finance and modernisation that dealt with daily operations, which also involved the Directors-General (DGs) of the different government departments. There were also inter-ministerial meetings in which the Minister of Finance represented SARS. As part of the implementation protocol and case management, SARS built signal window properties into the customs system, where information could be transposed to different government agencies. This would be finalised in the next six months.

Follow-up questions

Mr van Der Westhuizen asked to what extent SARS was able to fast-track allowing goods to enter the country and not having to be delayed by a recipient who may need to pay the necessary taxes to receive their goods.

Mr Sileku asked why Western Cape residents were more compliant than the rest of the country.

The Chairperson asked if SARS had engaged with Interpol as a possible stakeholder in terms of risk profiling. Would it be fair to say that the work done by the entity in terms of risk profiling was a form of protective mechanism in response to global inflation?

Follow-up responses

Mr Theron said that when it came to e-commerce, a declaration must be made, and the courier usually made it on one's behalf. It was assumed that they would have the information in advance to do so. There were two ways to make the declaration – a manual DA306 process, which was limited to certain amounts, or a formal declaration that could be completed much quicker. There were some challenges in the manual process that SARS was looking to address. There were plans for international suppliers to engage with SARS to start the declaration from their side before reaching South Africa.

Mr Kieswetter said that for entities that imported regularly, there was a licensing requirement to be listed as a preferred importer, which allowed them to have an easier experience when declaring goods. This was part of the process of the entity doing more work at the ports of entry and focusing more on strategic risk profiling work so that interventions at the ports were at a minimum.

There was no real answer as to why the Western Cape was more tax compliant, but there had been a shift in compliance activities in the province. The Commissioner thanked the legislature for their role in ensuring that it fulfilled its mandate.

SARS was a member of Open Security Collaborative Development. (OSCD), which had various agreements and protocols that allowed for information exchange. South Africa had signed the protocol of knowledge exchange, which allowed South Africa to automatically receive information about South Africans who had financial assets overseas. The information on request protocol allowed SARS to ask for information about a particular taxpayer. There was also a protocol where if a taxpayer owed SARS but resided in another country, the occupied country of the taxpayer could collect tax on SARS's behalf, provided there was an agreement in place.

He said South Africa leans towards an open economy, which generally attracts investment. It fared better than most of its peers with the rule of law, protection of rights, public national accounts, and best auditors, and the Johannesburg Stock Exchange (JSE) was regularly featured as one of the top stock exchanges in the world. The challenge was enforcing its laws, leading to South Africa being grey-listed. The tax implication of this was that SARS would rather have access to beneficial ownership of information than legal ownership of information. At present, SARS has access to beneficial ownership due to current exchange protocols with banks which could be shared with legal entities such as the National Prosecuting Authority (NPA). This ensured that South Africa could balance domestic interests with its international ones.


Department of Transport presentation

Ms Nomsa Mtshwene, Director: Public Transport Information Management, DoT, spoke on the backlog statistics and challenges of tourism operating licences. The National Public Transport Regulator (NPTR) had been meeting since June 2022 to fast-track the application backlog. What had been causing the delays in dealing with the backlog was the absence of a permanent NPTR committee to review and approve applications and an outdated, manual application system. Since then, the Minister appointed a part-time interim NPTR committee in April 2022, and has worked timeously to reduce the backlog while considering new applications. Despite this, the successful operators were not collecting their licences, which led the Department to partner with the Tourism Business Council of South Africa to do road shows to get operators to collect their licences. What had been discovered was that some operators, due to financial constraints imposed by the COVID-19 pandemic, had had to sell their vehicles. It was also due to operators applying for licences when they had not yet purchased their vehicles or did not meet the application criteria after receiving approval.

Another issue was Regulation 25 (2) of the National Land Transport Regulations of 2009, which allowed approved operators to continue to operate with a receipt of their renewal application along with their original licence until their renewal application had been approved. What happened was that law enforcement authorities would impound vehicles as they did not recognise the receipt, interpreted the law differently, or there would be operators who did not meet the renewal requirements. A meeting between Ministers and Members of Executive Councils (MINMEC) and national transport authorities resolved that a letter should be written to all MECs to clarify this regulation and ensure that law enforcement agencies comply with the regulation.

The NPTR had other functions, but they were currently focusing on transport operating licences and accreditation. A case was made for the NPTR to fulfil all its other functions, which had been sent to the DG for consideration for the 2023/24 financial year.

The National Land Transport System (NLTS) was undergoing a review to automate the application and other administrative processes. It would reduce the time to review documents and ensure that the applications and administrative processes were fast-tracked.

The National Land Transport Amendment Bill was currently being presented to provincial legislatures, with Free State, the North West and Northern Cape still requiring presentations of the Bill before returning to Parliament for further review. The Bill would ensure that a permanent NPTR committee was established.

See attached for full presentation

Discussion

Mr van Der Westhuizen asked what the interim NPTR committee’s term of office was. It had been appointed in April 2022, and he was wondering if there would be a situation where there would not be a permanent committee once their term of office came to an end.

What was the monthly number of applications the Department received, and what was the current turnaround time to consider and adjudicate these applications?

Had the Western Cape legislature considered the amendment bill? If so, where was the link to the presentation?

Mr Sileku asked how many applicants had the least desire to uplift their operating licences in the province. How much time did the Department spend processing an application?

The Chairperson wanted to find out what mechanisms the Department had in communicating the backlog of applications to the industry and ensuring they were up to date with their licensing applications.

What were the timeframes for processing operating licences, and how did this compare to the current norm?

What support measures were there for businesses wanting to expand their operations by buying more vehicles? Could they apply for a licence and then use their receipt to do so?

DoT's response

Ms Mtshwene said that the interim committee had been established in the hope that the President would have signed the amendment bill into law, which had not been the case. With the signing of the law, this would mean that a permanent structure of non-executive directors would be established. The legislation stated that the Minister must appoint a committee with full-time or part-time members. The interim committee would remain until such time that the Bill had been signed.

The NPTR received around 100 applications per month, which were mainly for tourist transport operations. The turnaround time was stipulated in legislation as within 60 days of receiving a completed application, but the Department was not always able to meet this deadline due to no committee being in place, and incomplete applications, which the Department tried to get operators to complete despite legislation stating that such applications must be rejected.

A request would be made to the Chief Director to provide the link to the amendment bill presentation in the province.

The Department did not have the number of applications from operators in the province who wanted to uplift their operation licences, but it would source this information for the Committee. From a national perspective, only 619 operating licences had been uplifted and collected. The remaining licences had not been collected due to a loss of interest by operators, who said they would not be able to collect new fleets. 200 operators had applied for operating licences, but they still needed to purchase vehicles which may take time. By the time they return to the Department, their licences may be cancelled as, by law, licences must be cancelled if they were not collected within 60 days. However, the Department makes exceptions for this as there could be mitigating circumstances that were not the fault of the operators.

The minimum time spent on an application depended on whether an application was fully completed and on a first-come, first-served basis, as the committee reviewed applications on a rolling basis once an application had been processed. By law, an application should be processed and considered within 60 days, but this was not always possible. With plans to automate the application process, finalising applications within the 60-day timeframe would be possible.

Application backlogs were communicated via a steering committee that the Minister had established. The committee met to assess challenges and was tasked with communicating with their constituencies on the challenges that were faced and progress made in finalising applications. In addition to this, rolling road shows were used to communicate with operators, as well as individuals providing written responses to queries by operators.

A challenge that arises is that during road shows, the operators lodge applications through consultants, making them their proxy. The consultant did not forward any correspondence to the operator or lodge their applications. There was also concern that some operators, when completing an online application, do not respond to correspondence from the Department on the email that they had provided. There was a need for improved communication methods for both the Department's officials and operators.

Legislative amendments needed to be made for operators to use their application receipts to purchase new fleets. The current legislation required a licence to have been issued first.

Follow-up discussion

Mr van Der Westhuizen asked when the Department would be able to adhere to its legislation of finalising applications within 60 days.

The Chairperson said that since the Department continues to engage with applicants who had incomplete applications, although the legislation requires that their applications be rejected, why did it not do the same for operators who had application receipts to expand their operations so that they could help the economy and create jobs?

How would the automated process help with the application process, and what would it look like?

Follow-up responses

Ms Mtshwene said that the Department was not able to provide an answer regarding the renewal application receipts of operators. It had not implemented the provision fully due to the COVID-19 pandemic being an exceptional circumstance. Additionally, the chances of rejecting a renewal application were slim, as the operators already had an existing understanding of how to operate their fleets according to their licences. With newer operating applications, it was not guaranteed that the application would be given. Allowing applicants, both new and renewal, to operate with only a receipt would lead to an expectation that they would very likely get their licence, which may not be the case.

In terms of automation, operators would be able to lodge and upload documents through the online portal which the support team at the Department would verify. It would also help the Department to track how long an application had been in the system and to fast-track applications being forwarded to officials. The aim was for it to become a paperless process so that the committee could speedily review all applications and meet the legislative timeframe of finalising them. The online portal was being finalised to allow the automation process to unfold and ensure that the NPTR committee frequently meets to consider all applications. The Department would be able to provide an update at the next standing committee meeting.

Committee Resolutions

Mr van Der Westhuizen thanked all the entities for presenting before the Committee, and for the remarkable improvement in tourism in the province. Compared to the World Tourism Association estimates, the recovery had been remarkable. He asked that the Committee request all relevant stakeholders to market the province as a winter destination, as the tourism industry could experience a long period of low numbers during this season. It would be beneficial to build on the current momentum of impressive visitor numbers, and the winter season had a lot to offer.

The Department of Transport hesitated to commit to the 60-day time for processing licence applications. The Department should, in three months' time, provide an update to the Committee about their turnaround time.

Mr Mvimbi asked that the Committee ask the Department of Tourism to provide a breakdown of the demographics of tour guides throughout the province.

The Chairperson congratulated Wesgro for winning several awards for the Never-Ending Tourist Campaign, which got 3.5 million impressions across all marketing platforms.

Mr van Der Westhuizen noted that Cape Town International Airport had won three awards and that the Committee should write letters of congratulations to them.

The Chairperson also requested that the ACSA be invited back to appear before the Committee in September or October to provide feedback on the expansion of George Airport and Cape Town International Airport. The ACSA had noted that they were awaiting the outcome of the economic review process due in September, which the Committee would like an update on.

ICT was a recurring issue which affected border management, e-Gates, the DHA and ACSA. The Committee needed to play a facilitating role by asking the Department of Home Affairs to provide information about the ICT challenges they were having regarding e-Gates, which would then allow for an ICT meeting between the Department and ACSA. There also needed to be a discussion with the Border Management Authority about the long queues faced at border points.

SARS and Commissioner Edward Kieswetter had been commended for turning around the entity and restoring trust with the public.

The Committee should write to the Minister of Transport to find out how they could support the ministry with companies wanting to expand or start their businesses in the transport tourism business so that they could be licensed correctly and contribute to the economy and job growth.

In June, the Committee should write to the Department of Home Affairs to follow up on the implementation of the remote working visa and how and when people could apply for these visas.

Mr van Der Westhuizen asked that the Committee ask the DHA to provide comparative figures for the last six months to track if it had addressed the current backlog of processing visas.

The Chairperson thanked all Members for their contributions to the meeting and hoped that they had found it to be a fruitful session. She also thanked all entities that had presented and made time in their busy schedule to answer questions from the Committee.

The meeting was adjourned.