Report of the Select Committee on Finance on its activities undertaken during the 4th Parliament (May 2009 – March 2014), dated 25 March 2014

 

1.             Introduction

 

 

1.1                  Department/s and Entities falling within the Committee’s portfolio

 

 National Treasury

The National Treasury is responsible for managing South Africa’s national government finances. The Department supports efficient and sustainable public financial management, which is fundamental to the promotion of economic development, good governance, social progress and raising the standard of living for all South Africans. The Constitution of the Republic of South Africa (Chapter 13) mandates the National Treasury to ensure transparency, accountability and sound financial controls in the management of public finances.

The National Treasury’s legislative mandate is also described in Chapter 2 of the Public Finance Management Act. In the PFMA, the National Treasury is mandated to promote government’s fiscal policy framework; to coordinate macroeconomic policy and intergovernmental financial relations; to manage the budget preparation process; to facilitate the Division of Revenue Act, which provides for an equitable distribution of nationally raised revenue between national, provincial and local government and to monitor the implementation of provincial budgets.

 

 

Entities

 

Name of Entity

Mandate of Entity

South African Revenue Services

The South African Revenue Service Act 34 of 1997, gives SARS the mandate to perform the following tasks:

·         Collect all revenues that are due;

·         Ensure maximum compliance with the legislation; and

·         Provide a customs service that will maximise revenue collection, protect our borders and facilitate trade.

 

Financial and Fiscal Commission

The Commission derives its mandate from Chapter 13 of the Constitution of the Republic of South Africa Act No. 108 of 1996 as amended. Sections 220, 221 and 222 as well as related Sections 214(2), 219(5), 228(2)(b), 229(5), 230(2), 230A(2) and 230A(2) provide among others that the Commission is an independent, objective, impartial and unbiased advisory institution that has to be consulted by Government with regard to division of revenue among the three spheres of government and in the enactment of legislation pertaining to provincial taxes, municipal fiscal powers and functions, and provincial and municipal loans.

South African Reserve Bank

The Reserve Bank is required to achieve and maintain price stability in the interest of balanced and sustainable economic growth in South Africa; 

The achievement of price stability is quantified by the setting of an inflation target by Government that serves as a yardstick against which price stability is measured;

The achievement of price stability is underpinned by the stability of the financial system and financial markets. For this reason, the Bank is obliged to actively promote financial stability as one of the important determinants of financial system stability;

Currently, sections 223 to 225 of the Constitution of the Republic of South Africa, 1996, the South African Reserve Bank Act, 1989 as amended and the regulations framed in terms of this Act, provide the enabling framework for the Bank's operations. The Bank has a considerable degree of autonomy in the execution of its duties.

In terms of section 224 of the Constitution, 1996, "the South African Reserve Bank, in pursuit of its primary object, must perform its functions independently and without fear, favour or prejudice, but there must be regular consultation between the Bank and the Cabinet member responsible for national financial matters." The independence and autonomy of the Bank are therefore entrenched in the Constitution;

The Bank has been entrusted with the overarching monetary policy goal of containing inflation. The Bank can use any instruments of monetary policy at its disposal to achieve this monetary policy goal. This implies that the Bank has instrument independence in monetary policy implementation but not goal independence in the selection of a monetary policy goal;

The Governor of the Bank holds regular discussions with the Minister of Finance and meets periodically with members of the Parliamentary Portfolio and Select Committees on Finance. In terms of section 32 of the South African Reserve Bank Act, 1989, the Bank publishes a monthly statement of its assets and liabilities and submits its Annual Report to Parliament. The Bank is therefore ultimately accountable to Parliament.

Financial Services Board

The Financial Services Board (FSB) was constituted by the Financial Services Board Act, 97 of 1990 (the Act). The functions of the board are:

  • To supervise the compliance with laws regulating financial institutions and the provision of

  financial services;

  • To advise the Minister on matters concerning financial institutions and financial services, either of its own accord or at the request of the Minister; and
  • To promote programs and initiatives by financial institutions and bodies representing the financial services industry to inform and educate users and potential users of financial products and services.

 

The FSB is a unique, independent institution established by statute to oversee the South African non-banking financial services industry in the public interest. The FSB’s mission is to promote sound and efficient financial institutions and services together with mechanisms for investor protection in the markets we supervise.

The Executive Officer of the FSB is the Registrar of Pension Funds, Registrar of Friendly Societies, Registrar of Long-Term Insurance, Registrar of Short-Term Insurance, Registrar of Stock Exchanges, Registrar of Financial Markets, Registrar of Collective Investment Schemes and the Registrar of Financial Services Providers.

Of importance is that the FSB’s purpose is to serve the public interest, not the private interests of market participants.

Financial Intelligence Centre

To establish and maintain an effective policy and compliance framework and operational capacity to oversee compliance and to provide high quality, timeous financial intelligence.

Development Bank of Southern Africa

The Development Bank of Southern Africa (DBSA)’s role, powers, functions and duties are defined by the Development Bank of Southern Africa Act, 1997.

These are published in the Government Gazette No17962 –Vol. 382 on 25 April 1997 – No 641.

The DBSA is registered as a company in terms of the Companies Act, 1973, but is exempt from the provisions of the Companies Act, 1973 (Act 61 of 1973).

The Minister may, by notice in the Gazette, apply any provision of the Companies Act, 1973, the Banks Act, 1990, or such other law to the Bank, in so far as such provision is not inconsistent with the provisions of the Development Bank of Southern Africa Act, 1997 (Act 13 of 1997) with such modifications as the Minister may deem fit and may specify in that notice, and may withdraw or amend any such notice.

Auditor-General

“The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector, thereby building public confidence.”

South African Local Government Association

SALGA is a listed public entity, established in terms of Section 21 of the Companies Act, 1973 (Act 61 of 1973), and recognised by the Minister of Cooperative Governance and Traditional Affairs in terms of the Organised Local Government Act, 1997 (Act 52 of 1997).

SALGA represents local government on numerous intergovernmental forums such as the PCC, Minister and MEC’s (MinMec) forum, the Budget Forum, the National Council of Provinces (NCOP) and the Financial and Fiscal Commission.

SALGA aims, among other things, to:

·         Transform local government to enable it to fulfil its developmental role;

·         Enhance the role of provincial local government associations as provincial representatives and consultative bodies on local government;

·         Raise the profile of local government;

·         Ensure full participation of women in local government;

·         Act as the national employers’ organisation for municipal and provincial member employers;

·         Provide legal assistance to its members, using its discretion in connection with matters that affect employee relations.

SALGA is funded through a combination of sources, including a national government grant, membership fees from provincial and local government associations that are voluntary members, and donations from the donor community for specific projects.

Land Bank

The mandate of the Land Bank is agricultural development.  This makes the Bank different from other banks and financial institutions in that it lends money for farming, processing and marketing in South Africa. The Bank's mandate enables it to offer special development programmes and strategies which include:

  • Access to loans made easier for historically disadvantaged business people -to help with putting a farming business together;
  • Loans for land reform beneficiaries to help with the government's redistribution efforts;
  • A special loan for historically disadvantaged people buying farm property for the first time (called the Special Mortgage Bond);
  • Support for rural stability through the rescheduling of debt for business people facing hard times;
  • The launch of a lower interest rate for farmers who show commitment to development by creating jobs, improving workers housing and living conditions,  and for caring for their land and environment; and
  • A micro-loan scheme for people starting small farming businesses but who can't get loans from other banks. The micro-loan helps people get a track-record of good borrowing so that they can get bigger loans in future.

 

Municipalities

The mandate of the municipality, as contained in section 152 of the Constitution, is:

  • To provide democratic and accountable government for local communities;
  • To ensure the provision of services to communities in a sustainable manner;
  • To promote social and economic development;
  • To promote a safe and healthy environment; and
  • To encourage the involvement of communities and community organisations in the matters of local government

These policy statements guide the formulation and implementation of the integrated development plan and every decision and action of the municipality.

 

 

 

 

 

1.2                  Functions of the Committee

 

Parliamentary committees are mandated to:

 

·         Monitor the financial and non-financial performance of government departments and their entities to ensure that national objectives are met.

·         Process and pass legislation.

·         Facilitate public participation in Parliament relating to issues of oversight and legislation.

The Select Committee on Finance was established in terms of Section 4(1) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009. In terms of Section 4(2) of this Act, the Committee has powers and functions conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including considering and reporting on:

·         The national macro-economic and fiscal policy;

·         Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills;

·         Actual revenue published by the National Treasury; and

·         Any other related matter set out in this Act.

The mandate further encompasses the Committee’s function to legislate, conduct oversight on the Executive actions; facilitate public participation, facilitate international agreements, and review matters of public interest in relation to the National Treasury and its entities and the South African Reserve Bank.

 

1.3                  Method of work of the Committee

 

The Committee conducted oversight visits to engage with identified municipalities together with the national and provincial departments on the following issues: development and implementation of municipalities’ budgets; compliance with the Municipal Finance Management Act (MFMA); spending and performance of municipalities with regards to conditional grants; the relations and collaboration between the municipalities and various national and provincial departments (including parastatals); service delivery and capacity constraints of the municipalities; and the alignment of municipalities’ Integrated Development Programmes with the Provincial Growth and Development Strategy.

The stakeholders invited to participate in the meetings during the oversight visits included the National and Provincial Departments of Cooperative Governance; the National and Provincial Treasuries; South African Local Government Association (SALGA); the Department of Energy; Financial and Fiscal Commission (FFC); the Department of Water and Environmental Affairs; the Office of the Auditor-General; the Development Bank of Southern Africa and Eskom, the MECs for Finance, and Provincial Finance Committees in the Legislatures.

The Select Committee on Finance had facilitated public participation through public hearings held in Parliament with the stakeholders. The Committee also invited submissions from the general public through the media. These submissions were then considered, assessed, adopted and tabled. Some of the stakeholders that the Committee engaged with during public hearings are the Manufacturing Circle, Business Unity South Africa (BUSA); Earth Life Africa; Financial and Fiscal Commission (FFC); South African Institute of Tax (SAIT); National Union of Metalworkers South Africa (NUMSA); Federation of Unions of Southern Africa (FEDUSA); South African Institute of Chartered Accountants (SAICA) and Pricewaterhouse Coopers (PwC). These stakeholders made submissions with regards to the fiscal framework and revenue proposals.

The Cabinet in terms of section 100 (2) (a) of the Constitution, resolved that some Ministers will resume responsibility for relevant functions of the Provincial Executive of the Limpopo Province, in terms of section 100 (1) (b) of the Constitution.  During the period of the intervention, members of the NCOP that serve on the Select Committees on Finance, Appropriations, Social Services, Education and Public Services visited the Province (on three occasions) to engage with the leadership of the departments placed under administration. The Administrators for each of the departments under intervention were appointed and were tasked with developing action plans. The Select Committee on Finance compiled an oversight report based on the observations and findings made during the interactions with different stakeholders. The Committee tabled three oversight reports (with recommendations) in Parliament. Key amongst the recommendations was the decision to review the intervention regularly (quarterly). Section 100 (2) (c) of the Constitution provides for the NCOP to, whilst an intervention continues, review the intervention regularly and make recommendations to the National Executive.

The Committee dealt with the legislation referred to it in terms of the requirements of the Money Bills Act, the Constitution and the Standing Rules of the National Council of Provinces. The specific legislation that the Committee had dealt with is discussed in the report.

 

1.4                  Purpose of the report

 

The purpose of this report is to provide an account of the Select Committee on Finance’s work during the 4th Parliament and to inform the Members of the new Parliament of key outstanding issues pertaining to the oversight and legislative programme of the National Treasury and its entities.

This report provides an overview of the activities that the Committee undertook during the 4th Parliament, the outcomes of key activities, the challenges that emerged during the period under review and issues that should be considered for follow up during the 5th Parliament. It summarises the key issues for follow-up and make recommendations to strengthen operational and procedural processes to enhance the Committee’s oversight and legislative roles in future.

 

2.             Key statistics

 

The table below provides an overview of the number of meetings held, legislation and international agreements processed and the number of oversight trips and study tours undertaken by the Committee, as well as statutory appointments the Committee made, during the 4th Parliament.

Activity

2009/10

2010/11

2011/12

2012/13

2013/14

Total

Meetings held

48

34

23

20

33

158

Legislation processed

5

3

4

5

12

28

Oversight trips undertaken

2

2

5

1

1

11

Study tours undertaken

0

0

0

0

0

0

International agreements processed

4

14

3

10

0

31

Statutory appointments made

0

0

0

0

1

1

Interventions considered

0

0

1

0

0

1

Petitions considered

0

0

0

0

0

0

 

 

3.             Legislation

 

The following pieces of legislation were referred to the Committee and processed during the 4th Parliament:

 

Year

Name of Legislation

Tagging

Objectives

Completed/Not Completed

2009/10

Appropriation Bill [B5 – 2009]

 

Section 77

 

To appropriate money from the National Revenue Fund for the requirements of the State for the 2009/10 financial year; to prescribe conditions for the spending of funds withdrawn for the 2010/11 financial year before the commencement of the Appropriation Act for the 2010/11 financial year;  and to provide for matters incidental thereto.

 

Completed

 

Adjustments Appropriation Bill [B13 – 2009]

 

Section 77

 

 To effect adjustments to the appropriation of money from the National Revenue Fund for the requirements of the State in respect of the 2009/10 financial year; and to provide for matters incidental thereto.

 

Completed

 

Western Cape Inherited Debt Relief Bill [B6-2009]

 

 

To authorise the discharge of certain debts of the former Cape Provincial Administration and the former House of Representatives, which have devolved upon the Western Cape Province in terms of the Constitution of the Republic of South Africa, 1993, and are still outstanding; to make arrangements for the settling of accounts in relation to the debts; and to provide for matters incidental thereto.

 

Completed

 

Taxation Laws Second Amendment Bill [B11-2009]

Section 75

To provide for the allocation of payments; amend the Transfer Duty Act, 1949, so as to extend a time period; 
amend the Estate Duty Act, 1955, so as to amend a time period; and to repeal a section; amend the Income Tax Act, 1962, so as to insert new provisions; to amend 
the calculation of interest; to amend a definition; and to effect textual and consequential amendments; 
amend the Customs and Excise Act, 1964, so as to amend provisions empowering the withdrawal or amendment of a decision, notice or communication; to amend provisions regulating the removal in bond of goods; to amend provisions regulating the exportation of goods from a customs and excise warehouse; to insert special provisions regarding the storage and clearance of stores, spares and equipment supplied to foreign-going ships and aircraft; to insert a provision specifying circumstances in which goods free of duty may be entered under a rebate item of Schedule No. 4; to amend provisions under which a penalty may be mitigated or remitted; to amend provisions regulating payment of outstanding amounts and interest; to insert a provision empowering the making of rules for the purposes of modernising customs administration; and to effect  textual and consequential amendments; amend the Value-Added Tax Act, 1991, so as to insert a definition; to insert new provisions; to amend the calculation of interest; and to effect textual and consequential amendments; amend the Skills Development Levies Act, 1999, so as to amend a definition; to insert new provisions; to amend the calculation of interest; and to effect textual and consequential amendments; 
amend the Unemployment Insurance Contributions Act, 2002, so as to amend a definition; to insert new provisions; to amend the calculation of interest; and to effect textual and consequential amendments; amend the Diamond Export Levy (Administration) Act, 2007, so as to
amend a time period; to amend refunds; to amend the calculation of interest; and to effect textual and consequential amendments; amend the Diamond Export Levy Act, 2007, so as to clarify an existing provision; 
amend the Securities Transfer Tax Act, 2007, so as to extend a time period; amend the Mineral and Petroleum Resources Royalty (Administration) Act, 2008, so as to amend effective dates; to provide for nonbinding private 
opinions; and to effect textual amendments, and to provide for matters connected therewith.

Completed

 

Taxation Laws Amendment Bill [B10-2009]

Section 77

To amend the Transfer Duty Act, 1949, so as to amend a definition; to make a new provision; to provide for an exemption; to effect consequential amendments; amend the Estate Duty Act, 1955, so as to make further provision for a deduction; amend the Income Tax Act, 1962, so as to fix the rates of normal tax and amend monetary amounts; to amend and insert certain definitions; to effect technical corrections; to repeal certain provisions; to amend certain provisions; to make a new provision; to effect textual and consequential 
amendments; amend the Customs and Excise Act, 1964, so as to amend the air passenger tax; to amend rates of duty in Schedule No. 1; to provide for the continuation of certain amendments to the Schedule; amend the Banks Act, 1990, so as to effect a consequential amendment; 
amend the Value-Added Tax Act, 1991, so as to amend monetary amounts; to insert a new provision; to effect consequential amendments; amend the Taxation Laws Amendment Act, 2004, so as to change an effective date; amend the Revenue Laws Amendment Act, 2006, so as to change effective dates; amend the Diamond Export Levy Act, 2007, so as to insert a definition; to 
clarify a provision; amend the Securities Transfer Tax Act, 2007, so as to make a textual amendment; amend the Mineral and Petroleum Resources Royalty Act, 2008, so as to amend effective dates; to amend provisions; to update a Schedule; amend the Revenue Laws Amendment Act, 2008, so as to amend commencement provisions; introduce measures relating to sharing of general fuel levy revenue; provide for special measures relating to zero-rating of certain goods and services; and to provide for matters connected therewith.

Completed

 

 

 

 

 

2010/11

South African Reserve Bank Amendment Bill [B10-2010]

Section 75

To amend the South African Reserve Bank Act, 1989 (Act No. 90 of 1989) (“the Act”) in order to achieve the following objectives: To stop shareholders of the South African Reserve Bank (“the Bank”) from circumventing the Act's current limitation of a maximum of 10 000 shares per shareholder; to allow for the nomination of directors by a broader base of the South African public and to broaden representation on the Board of the Bank (“the Board”); to provide for the establishment of a Panel for the election of directors; to define clear criteria regarding when persons are disqualified from serving on the Board; to provide for the confirmation of Board nominees against ‘fit and proper’ and fiduciary criteria; to clarify the powers and functions of the Board, which will primarily be those of governance, with all remaining powers and duties of the Bank as set out in section 10 of the Act being vested in and being exercised by the Governor and Deputy Governors; and to provide for the possibility of the Governor and Deputy Governors to be re-appointed to serve a term of less than five years.

Completed

 

Voluntary Disclosure Programme and Taxation Laws Second Amendment Bill [B 29– 2010]

Section 75

To introduce a voluntary disclosure programme; amend the Transfer Duty Act, 1949, so as to provide for electronic submission of returns and electronic payment of duty; amend the Income Tax Act, 1962, so as to amend certain provisions; amend the Unemployment Insurance Contributions Act, 2002, so as to effect a technical correction; amend the Mineral and Petroleum Resources Royalty (Administration) Act, 2008, so as to amend certain provisions; and provide for matters connected therewith.

Completed

 

Taxation Laws Amendment Bill [B 28– 2010]

Section 77

To amend the Transfer Duty Act, 1949, so as to amend a provision; amend the Income Tax Act, 1962, so as to amend, delete and insert certain definitions; to effect technical corrections; to repeal certain provisions; to amend certain provisions; to make new provision; and to effect textual and consequential amendments; amend the Customs and Excise Act, 1964, so as to amend provisions; and to make provision for continuations; amend the Income Tax Act, 1990, so as to effect technical corrections; amend the Value-Added Tax Act, 1991, so as to amend certain provisions; amend the Unemployment Insurance Contributions Act, 2002, so as to amend a provision; amend the Securities Transfer Tax Act, 2007, so as to amend certain provisions; and to effect a consequential amendment; amend the Revenue Laws Amendment Act, 2008, so as to effect technical corrections; amend the Taxation Laws Amendment Act, 2009, so as to effect technical corrections; amend the Taxation Laws Amendment Act, 2010, so as to repeal a

provision; and to effect technical corrections; amend the Taxation Laws Amendment Act, 2011, so as repeal a provision; and to effect technical corrections; and to provide for matters connected therewith.

Completed

 

 

 

 

 

2011/12

Tax Administration Bill [B11-2011]

Section 75

To provide for the effective and efficient collection of tax; to provide for the alignment of the administration provisions of tax Acts and the consolidation of the provisions into one piece of legislation to the extent practically possible.

Completed

 

Taxation Laws Amendment Bill [B19 - 2011]

Section 77

To amend the Transfer Duty Act, 1949, so as to amend and delete certain definitions; to modify rates and thresholds; to make new provision; and to effect textual and consequential amendments.

Completed

 

Taxation Laws Second Amendment Bill [B20-2011]

Section 75

To amend the Income Tax Act, 1962, so as to amend certain provisions; amend the Customs and Excise Act, 1964, so as to amend certain provisions; to make additional provision for disclosure of information; to broaden the scope of a provision; and to make provision for continuations; and to provide for matters connected therewith.

Completed

 

Government Employees Pension Law Amendment Bill [B15-2011]

Section 75

To amend the Government Employees Pension Law, 1996, so as to amend a definition and insert a definition; to provide for the payment of a pension interest to a former spouse of a member on divorce or the dissolution of a customary marriage; to amend the powers of the Board to make rules; to amend the provisions providing for the recognition of pensionable service of former members of non-statutory forces or services; and to provide for matters connected therewith.

Completed

 

 

 

 

 

2012/13

Credit Rating Services Bill [B8-2012]

Section 75

To provide for the registration of credit rating agencies; provide for the regulation of certain activities of credit rating agencies; provide conditions for the issuing of credit ratings and rules on the organisation and conduct of credit rating agencies; and to provide matters connected therewith.

Completed

 

Financial Markets Bill [B12-2012]

Section 75

To provide for the regulation of financial markets; license and regulate exchanges, central securities depositories, clearing houses and trade repositories; regulate and control securities trading and the custody and administration of securities; prohibit insider trading and other market abuses; provide for the approval of nominees; provide for codes of conduct; replace the Securities Services Act, 2004, as amended by the Financial Services Laws General Amendment Act, 2008, so as to align this Act with international standards; and to provide for matters connected therewith.

Completed

 

Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B10 - 2012]

Section 77

To fix the rates of normal tax; amend the Income Tax Act, 1962, so as to amend rates and monetary amounts; amend the Customs and Excise Act, 1964, so as to amend rates of duty in Schedule 1; and to provide for matters connected therewith.

Completed

 

Tax Administration Laws Amendment Bill [B35-2012]

Section 75

To make a provision for the enactment of an international agreement into law; insert a provision providing for the application of the Tax Administration Act, 2011, to certain matters relating to customs and excise; amend the Estate Duty Act, 1955, so as to effect a consequential amendment; amend the Income Tax Act, 1962, so as to effect textual amendments; to amend certain provisions; to insert new provisions and to effect

consequential amendments; amend the Customs and Excise Act, 1964, so as to amend a provision; amend the Value-Added Tax Act, 1991, so as to amend a provision and to insert a new provision; amend the Unemployment Insurance Contributions Act, 2002, so as to effect a textual amendment; amend the Mineral and Petroleum Resources Royalty (Administration) Act, 2008, so as to insert certain provisions; amend the Taxation Laws Second Amendment Act, 2009, so as to repeal a provision; amend the Taxation Laws Second Amendment Act, 2011, so as to postpone an effective date; amend the Tax Administration Act, 2011, so as to effect technical corrections, to regulate tax practitioners; and to provide for matters connected therewith.

Completed

 

Taxation Laws Amendment Bill [B34 - 2012]

Section 77

To amend the Transfer Duty Act, 1949, so as to amend a provision; amend the Income Tax Act, 1962, so as to amend, delete and insert certain definitions; to effect technical corrections; to repeal certain provisions; to amend certain provisions; to make new provision; and to effect textual and consequential amendments; amend the Customs and Excise Act, 1964, so as to amend provisions; and to make provision for continuations; amend the Income Tax Act, 1990, so as to effect technical corrections; amend the Value-Added Tax Act, 1991, so as to amend certain provisions; amend the Unemployment Insurance Contributions Act, 2002, so as to amend a provision; amend the Securities Transfer Tax Act, 2007, so as to amend certain provisions; and to effect a consequential amendment; amend the Revenue Laws Amendment Act, 2008, so as to effect technical corrections; amend the Taxation Laws Amendment Act, 2009, so as to effect technical corrections; amend the Taxation Laws Amendment Act, 2010, so as to repeal a provision; and to effect technical corrections; amend the Taxation Laws Amendment Act, 2011, so as repeal a provision; and to effect technical corrections; and to provide for matters connected therewith.

Completed

 

 

 

 

 

2013/14

Merchant Shipping (International Oil Pollution Compensation Fund) Administration Bill [B42 – 2013]

Section 75

To provide for administrative matters in connection with the levy imposed in terms of the Merchant Shipping (International Oil Pollution Compensation Fund) Contributions Act, 2013; and to provide for matters connected therewith.

Completed

 

Merchant Shipping (International Oil Pollution Compensation Fund) Contributions Bill [B41 – 2013]

Section 77

To provide for the imposition of the International Oil Pollution Compensation Fund Contributions Levy on persons referred to in Article 10 of the 1992 Fund Convention; to provide for the manner in which the levy is determined; to provide that levies and interest due to be paid to the International Oil Pollution Compensation Fund are a direct charge against the National Revenue Fund; and to provide for matters connected therewith.

Completed

 

Banks Amendment Bill [B43-2012]

Section 75

To amend the Banks Act, 1990, so as to define certain expressions and to amend certain definitions; to bring certain provisions in line with their practical application; to update references to legislation and institutions; to extend the use of the name bank to representative offices; to provide that a contravention of the Financial Intelligence Centre Act, 2001, is a cause for suspension or cancellation of registration as a bank; to align the Banks Act, 1990, with the Companies Act, 2008; and to comply further with the requirements of the Basel Committee of Banking Supervision; and to provide for matters connected therewith.

Completed

 

Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B12 - 2013]

Section 77

To fix the rates of normal tax; to amend the Income Tax Act, 1962, so as to amend rates and monetary amounts; to amend the Customs and Excise Act, 1964, so as to amend rates of duty in Schedule 1; and to provide for matters connected therewith.

Completed

 

Financial Services Laws General Amendment Bill [B29-2012]

Section 75

To amend and update the Pension Funds Act, 1956, the South African Reserve Bank Act, 1989, the Financial Services Board Act, 1990, the Long-term Insurance Act, 1998, the Short-term Insurance Act, 1998, the Inspection of Financial Institutions Act, 1998, the Financial Institutions (Protection of Funds) Act, 2001, the Financial Advisory and Intermediary Services Act, 2002, the Collective Investment Schemes Control Act, 2002, the Co-operative Banks Act, 2007, and the Financial Services Laws General Amendment Act, 2008, in order to close regulatory gaps, to effect improvements to certain provisions, to provide for increased supervisory capabilities, to rationalise and align the supervisory functions afforded to the Registrar; and to align the aforementioned Acts with the Companies Act, 2008; to amend the National Payment System Act, 1998, the Medical Schemes Act, 1998, and the Co-operatives Act, 2005, to the extent that those laws impact on the stability of the financial services sector and impede on a holistic regulatory approach and effective supervision; and to provide for matters connected therewith.

Completed

 

Employment Tax Incentive Bill [B46 - 2013]

Section 77

To provide for an employment tax incentive in the form of an amount by which employees’ tax may be reduced; to allow for a claim and payment of an amount where employees’ tax cannot be reduced; and to provide for matters connected therewith.

Completed

 

Tax Administration Laws Amendment Bill [B40-2013]

Section 75

To amend the Transfer Duty Act, 1949, so as to effect consequential amendments; amend the Income Tax Act, 1962, so as to effect textual and consequential amendments; to amend provisions; and to effect technical corrections; amend the Customs and Excise Act, 1964, so as to amend a provision; to make a new provision; and to amend provisions; amend the Value-Added Tax Act, 1991, so as to effect technical corrections; amend the Skills Development Levies Act, 1999, so as to make a new provision; and to effect consequential amendments; amend the Unemployment Insurance Contributions Act, 2002, so as to make a new provision; and to effect consequential amendments;  amend the Securities Transfer Tax Act, 2007, so as to effect consequential amendments; amend the Mineral and Petroleum Resources Royalty Act, 2008, so as to effect consequential amendments; amend the Mineral and Petroleum Resources Royalty (Administration) Act, 2008, so as to effect a technical correction; amend the Tax Administration Act, 2011, so as to amend certain provisions; to effect technical corrections; and to effect textual and consequential amendments; and to provide for matters connected therewith.

Completed

 

Taxation Laws Amendment Bill [B39 - 2013]

Section 77

To amend the Transfer Duty Act, 1949, so as to amend provisions; amend the Estate Duty Act, 1955, so as to amend a provision; amend the Income Tax Act, 1962, so as to amend, delete and insert certain definitions; to effect technical corrections; to repeal certain provisions; to amend certain provisions; to make new provision; and to effect textual and consequential amendments;  amend the Customs and Excise Act, 1964, so as to amend provisions; and to make provision for continuations;  amend the Value-Added Tax Act, 1991, so as to amend certain provisions; repeal the Demutualisation Levy Act, 1998; amend the Securities Transfer Tax Act, 2007, so as to amend a provision; amend the Mineral and Petroleum Resources Royalty Act, 2008, so as to amend certain provisions; and to amend Schedules; amend the Taxation Laws Amendment Act, 2011, so as to amend certain provisions; amend the Taxation Laws Amendment Act, 2012, so as to amend certain provisions; and to effect technical corrections; make provision for special zero-rating in respect of goods and services supplied in certain circumstances; and to provide for matters connected therewith.

Completed

 

Customs and Excise Amendment Bill [B44B – 2013]

Section 75

To amend the Customs and Excise Act, 1964, so as to delete all provisions superseded by general provisions of the Customs Control Act applicable to all tax levying Acts; to delete all provisions relating to the customs control of imported goods and goods to be exported; to delete all provisions relating to the imposition, collection and refunding of customs duties and other matters relating to customs duties; to limit the remaining provisions of the Act to excise duties, fuel levies, Road Accident Fund levies, environmental levies, air passenger taxes and matters relating to such duties, levies and taxes; and to change the name of the Act to the Excise Duty Act, 1964; and to provide for matters connected therewith.

Completed

 

Customs Control Bill [B45B – 2013]

Section 75

To provide for customs control of all vessels, aircraft, trains, vehicles, goods and persons entering or leaving the Republic; to facilitate the implementation of certain laws levying taxes on goods and of other legislation applicable to such goods and persons; and for matters incidental thereto.

Completed

 

Customs Duty Bill [B43 – 2013]

Section 77

To provide for the imposition, assessment, payment and recovery of customs duties on goods imported or exported from the Republic; and for matters incidental thereto.

Completed

 

Financial Management of Parliament Amendment Bill [B1 – 2014]

Section 76

To amend the Financial Management of Parliament Act, 2009 so as to insert further definitions; to deal with the financial management of provincial legislatures; to amend the provisions dealing with the oversight mechanism; to amend provisions dealing with Parliament’s annual budget, appropriations and approvals; to amend the provisions dealing with donor funds; to delete certain provisions dealing with Parliament’s own revenue sources; to align the provisions dealing with reporting and auditing with the Public Finance Management Act, 1999; to repeal certain sections of the Powers and Privileges Act, 1963; to delete certain references to ‘‘provincial legislatures’’ in the Public Finance Management Act, 1999; to include references to performance management; to amend the long title; and to provide for matters connected therewith.

Completed (on 25 March 2014)

 

Challenges encountered

 

The following challenges emerged during the processing of legislation:

·         The National Assembly takes long to process Section 76 legislation. This puts pressure on the National Council of Provinces and its Committees to meet the six weeks cycle deadline; and

·         Some of the gaps in the Money Bills Act are the tight timeframes and lack of sanctions for non-compliance with the Act by the Committees.

Issues for follow-up

 

The 5th Parliament should consider following up on the following concerns that arose:

·         Section 76 legislation should be tabled in the National Council of Provinces, allowing more time for Committees to go through the six weeks cycle when processing it; and

·         The Committee should coordinate with the Standing Committee on Finance and the National Assembly to fas- track the process of reviewing the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009, in order to address some of the existing gaps that may prevent effective implementation of the Act.

 

4.             Oversight trips undertaken

 

The following oversight trips were undertaken:

 

Date

Area Visited

Objective

Status of Report

21 – 23 September 2009

Mpumalanga

To monitor and evaluate coordination pertaining to the provision of municipal services and support given to municipalities

Adopted

02 – 04 March 2010

Northern Cape

To monitor and evaluate coordination pertaining to the provision of municipal services and support given to municipalities

 

20 – 23 July 2010

North West

To monitor and evaluate coordination pertaining to the provision of municipal services and support given to municipalities

Adopted

15 – 16 September 2010

Gauteng, Pretoria

Oversight visit to the South African Reserve Bank

No report required

25 – 29 July 2011

Limpopo

NCOP Follow-up visit to Limpopo Province, to monitor progress made on the issues raised during Taking Parliament to the People.

 

16 – 19 August 2011

Free State

Due to the outcomes of the Auditor-General’s report on municipalities, the Committee resolved to conduct an oversight visit in order for municipalities to fast-track service delivery.

Adopted

10 – 14 October 2011

 

North West

The Committee conducted a follow-up visit to the municipalities it had visited in the North West Province during 20 – 23 July 2010, and planned to monitor progress made by the sector departments in assisting the struggling municipalities.

Adopted

24 – 27 January 2012

Northern Cape

The Committee conducted a follow-up visit to the municipalities it had visited in the Province of the Northern Cape during 2 – 4 March 2010, and plans to monitor progress made by the sector departments in assisting the struggling municipalities

 

Adopted

25 – 30 March 2012

Limpopo

To engage with five Limpopo departments in terms of section 100 (2) (c) of the Constitution of the Republic of South Africa, 1996.

Adopted

01 – 05 October 2012

Limpopo

 

To engage with five Limpopo departments in terms of section 100 (2) (c) of the Constitution of the Republic of South Africa, 1996.

Adopted

22 – 26 April 2013

Limpopo

 

Review of the Limpopo intervention in terms of section 100 (2) c of the Constitution of the Republic of South Africa.

Adopted

Challenges encountered

The following challenges emerged during the oversight visits:

·         Too many municipalities were invited, limiting time for the Committee to sufficiently engage with all the municipalities;

·         General non-compliance with legislation and regulations by municipalities, particularly with the governance, financial management, administration and service delivery;

·         Cash flow problems in most municipalities, reflecting poor planning and budgeting. Municipal budgets were also not credible;

Issues for follow-up

The 5th Parliament should consider following up on the following concerns that arose:

·         During oversight visits, the Committee should consider partnering the best performing municipalities with the under-performing ones in a province in order to share best practices;

·         The Committee should strengthen its oversight over municipalities and conduct on-site visits;

 

 

5.             Study tours undertaken

 

No study tours were undertaken due to time constraints and Parliamentary Programmes /activities. The Committee should consider conducting study tours and budget sufficiently for these tours.

 

 

 

 

 

 

 

 

6.             International Agreements and Protocols

 

The following international agreements were processed and reported on:

 

Date referred

Name of Agreement

Objective

Status of Report

16 September 2009

Agreement between the Republic of South Africa and the United Mexican States

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Adopted

16 September 2009

Agreement between the Republic of South Africa and the Federal Republic of Germany

Avoidance of Double Taxation with respect to Taxes on Income and on Capital

Adopted

11 August 2010

 

Protocol amending the Convention between the Government of the Republic of South Africa and the Government of Ireland

Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, with protocol

Adopted

11 August 2010

 

Protocol amending the Convention between the Republic of South Africa and the Kingdom of Sweden

Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

Adopted

18 April 2011

Protocol between the Government of the Republic of South Africa and the Government of the United Kingdom of Great Britain and Northern Ireland

To amend the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains

Adopted

18 April 2011

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Kenya

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Adopted

23 August 2011

Agreement on the establishment of the African Tax Administration Forum

Establishment of the African Tax  Administration Forum

Adopted

19 October 2011

Agreement between the Government of the Republic of South Africa and the Government of Bermuda for the exchange of information relating to tax matters

Exchange of information relating to tax matters

Adopted

19 October 2011

Protocol and additional protocol amending the convention between the Republic of South Africa and the Republic of Austria

Avoidance of Double Taxation with respect to taxes on income and capital, signed on 4 March 1996

Adopted

19 October 2011

Agreement between the Republic of South Africa and the Government of the Commonwealth of the Bahamas

Exchange of information relating to tax matters

Adopted

19 October 2011

Agreement between the Government of the Republic of South Africa and the Government of the Republic of San Marino

Exchange of information relating to tax matters

Adopted

19 October 2011

Agreement between the Government of the Republic of South Africa and the Government of Jersey

Exchange of information with respect to taxes

Adopted

19 October 2011

Protocol Amending the Agreement between the Government of the Republic of Seychelles and the Government of the Republic of South Africa

Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income

Adopted

19 October 2011

Agreement between the Government of the Republic of South Africa and the Government of the States of Guernsey

Exchange of information relating to tax matters

Adopted

19 October 2011

Agreement between the Government of the Republic of South Africa and the Government of the Cayman Islands

Exchange of information relating to tax matters

Adopted

19 October 2011

Protocol Amending the Agreement between the Government of the Republic of South Africa and the Government of Malaysia

Avoidance of Double Taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Pretoria on 26 July 2005

Adopted

15 February 2011

Protocol between the Government of the Republic of South Africa and the Government of the United Kingdom of Great Britain and Northern Ireland

To Amend the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains

Adopted

15 February 2011

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Kenya

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Adopted

31 May 2012

Agreement between the Government of the Republic of South Africa and the Government of Gibraltar

Exchange of information relating to tax matters

Adopted

31 May 2012

Agreement between the Government of the Republic of South Africa and the Government of the Commonwealth of Dominica

Exchange of information with respect to taxes and tax matters

Adopted

31 May 2012

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Liberia

Exchange of information relating to tax matters

Adopted

12June 2013

Convention on Mutual Administrative Assistance in Tax matters as amended by the 2011 protocol

Convention on Mutual Administrative Assistance in Tax Matters

Adopted

04June 2013

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Botswana

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income with Protocol

Adopted

04 July 2013

Convention between the Republic of South Africa and the Republic of Chile

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and on capital

Adopted

04 July 2013

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Costa Rica

Exchange of information relating to tax matters

Adopted

04 July 2013

Protocol Amending the Agreement between the Government of the Republic of South Africa and the Government of the Republic of Malta

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income signed at Rome on 16 May 1997

Adopted

04 June 2013

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Mauritius

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Adopted

04 July 2013

Agreement between the Government of the Republic of South Africa and the Government of Samoa

Exchange of information relating to tax matters

Adopted

12 June 2013

Supplementary Protocol Amending the Agreement between the Government of the Republic of South Africa and the Government of the Sultanate of Oman

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income

Adopted

04 July 2013

Protocol Amending the Convention between the Republic of South Africa and the Kingdom of Norway

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income

Adopted

10 September 2013

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Mozambique

Implementation of one-stop border posts (Combined Border Control Posts on the Mozambique-South Africa Border)

Adopted

Challenges

The following challenges emerged during the processing of international agreements:

·         Expiry of the terms of the agreements occurring at the same time put pressure on the Committee.

 Issues for follow-up

The 5th Parliament should consider following up on the following concern that arose:

 

 

7.             Statutory appointments

In terms of section 15 (1) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009, “There is hereby established a Parliamentary Budget Office headed by a Director, the main objective of which is to provide independent, objective and professional advice and analysis to Parliament on matters related to the budget and other money bills”.

 

Date

Type of appointment

Period of appointment

Status of Report

09 May 2014

Director Parliamentary Budget Office

Five years

Adopted by the House

 

8.             Interventions

 

The following intervention was referred to and processed by the committee:

Title

Date referred

Current status

 

Notice of intervention issued in terms of section 100 (1) (b) of the Constitution, 1996, to the Departments of Basic Education; Treasury; Health; Transport and Public Works in the Province of Limpopo.

 

 

14 December 2011

 

Completed

 

Challenges encountered

The following challenges were experienced during the process of the intervention:

·         Lack of clarification of roles and responsibilities impacted negatively on the implementation of the intervention;

·         The scope of the intervention did not have timeframes, action plans, exit strategies, review periods and service delivery plans;

·         Lack of sufficient skills (key senior positions filled) with qualified competent people to support the provincial departments and their entities; and

·         Inadequate measures in place to monitor and provide technical support and training to the provincial departments and entities.

Issues for follow-up

The 5th Parliament should consider following up on the following concerns that arose:

·         The Committee should review the Section 100 interventions regularly, preferably quarterly. This could be done through meetings and oversight visits including site visits; and

·         The Committee should follow up with the Minister of Cooperative Governance and Traditional Affairs to consider introducing national legislation to regulate the process of an intervention in line with the provisions of section 100 (3) of the Constitution, 1996.

 

 

9.             Petitions

 

No petitions were referred to the Committee during the fourth Parliament.

 

 

10.          Obligations conferred on Committee by legislation:

 

In terms of Section 4(2) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009, the Committee has powers and functions conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including considering and reporting on:

·         The national macro-economic and fiscal policy;

·         Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills;

·         Actual revenue published by the National Treasury; and

·         Any other related matter set out in this Act.

The mandate further encompasses the Committee’s function to legislate, conduct oversight on the Executive actions; facilitate public participation, facilitate international agreements, and review matters of public interest in relation to the National Treasury and its entities, and the South African Reserve Bank. 

 

 

11.          Recommendations

 

·         The Committee should strengthen and enhance partnerships with internal and external stakeholders such as the Parliamentary Budget Office, Financial and Fiscal Commission, the National Treasury and others;

·         The Committee should continue the quarterly interactions with the provincial treasuries and use the third quarter 2013/14 provincial treasuries’ budget and expenditure report as a basis to continue the provincial work done by the Committee;

·         The Committee should improve enforcement of legislation such as the PFMA, MFMA and any other relevant finance related legislation in the provinces and municipalities in terms of service delivery; and

·         The Committee should prioritise oversight over the municipalities that the 4th Parliament Committee could not visit due to time constraints.