Hansard: NCOP: Plenary; Consideration of Reports of Select Committee on Finance; Agreement between the Government of the Republic of South Africa & the Government of Mauritius for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

House: National Council of Provinces

Date of Meeting: 10 Oct 2013

Summary

No summary available.

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Minutes

"National Council of Provinces Main",Unrevised Hansard,14 Oct 2013,"Take 45 [National Council of Provinces Main].doc"

"National Council of Provinces Main",Unrevised Hansard,10 Oct 2013,"[Take-45] [National Council of Provinces Main][90P-5-085b][ml].doc"

UNREVISED HANSARD

NATIONAL COUNCIL OF PROVINCES

10 OCTOBER 2013

PAGE: 1

THURSDAY, 10 OCTOBER 2013

PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES

___________________

The Council met at 14:10.

The Deputy Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

NOTICES OF MOTION

START OF DAY

NOTICES OF MOTION

Mr D A WORTH: Deputy Chairperson, I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:

That the Council –

(1) notes that the Ministry of Trade and Industry has raised import tariffs on five poultry products by an average of 8,75% in a move to protect local producers from financial loss;

(2) further notes that this decision was made to protect local producers against cheap imports mainly from Brazil;

(3) welcomes that whilst tariff increases may go some way in protecting local jobs, this will expose consumers to higher prices; and

(4) hopes that the local poultry industry will address important issues such as the cost of electricity, infrastructure, labour and especially productivity to make use of this temporary relief to increase South Africa's poultry industry on a cost-efficient basis.

Mr A J NYAMBI

Mr D A WORTH

Mr A J NYAMBI: Deputy Chair, I hereby give notice that on the next sitting day of the Council I shall move on behalf of the ANC:

That the Council -

(1) notes that the DA has like, with the billboards in Gauteng, once again displayed its true colours of being nothing but its predecessors, the former Democratic and Progressive Federal Parties in disguise,a small opposition party that feeds on negative political advertising and campaigning for survival on the notion that what is bad for South Africa is good for the DA;

(2) further notes without any surprise that this unpatriotic opposition mentality and style of the DA again became evident on Wednesday, when the DA attempted to persuade the South African Institute for Race Relations not to proceed with its positive campaign to inform the public of the true picture in South Africa and on the progress made by the country under the ANC. In fact, Mr Gavin Davis, special adviser to DA leader, Ms Helen Zille, called on the institute rather to drop its campaign because it will be harmful to the DA if the public knows the true facts;

(3) further notes that it is a cause of serious concern to the DA when the successes of the ANC government is made known as this success puts the success of the DA's own negative campaign, which is thriving on lies and misleading facts, in jeopardy; and

(4) condemns these unpatriotic and cowardly actions of the DA and takes this opportunity to commend the Institute for Race Relations for putting South Africa first.

Mr K A SINCLAIR

Mr A J NYAMBI

Mr K A SINCLAIR: Deputy Chairperson, I hereby give notice that on the next sitting day of the Council I shall move on behalf of Cope:

That the Council –

(1) notes that –

(a) the International Monetary Fund says South Africa's poor growth performance cannot be blamed on weak global conditions alone, and that domestic factors such as strikes and policy uncertainty play an important part in holding back growth and investment;

(b) while acknowledging that poor global outlook is partly responsible for South Africa's growth lagging other emerging market economies, the IMF report pinpoints policy uncertainty, labour disruptions and electricity supply concerns as key problems that have held back investment and damaged growth and job creation;

(c) the IMF projects growth this year to slow to 2% and to recover only slightly to 3% and 3,5% in the next few years; and,

(3) calls on the South African government to take cognisance of the report and address the concerns to create a stable and prosperous economy serving the needs and aspirations of all South Africans.

Ms M W MAKGATE

Mr K A SINCLAIR

Ms M W MAKGATE: Deputy Chairperson, I hereby give notice that on the next sitting day of the Council I shall move on behalf of the ANC:

That the House –

(1) notes that –

(a) the ruling by the Constitutional Court last Thursday that the power of the school governing body, SGB, of Rivonia Primary School in Johannesburg, in the Gauteng province, to determine capacity as part of its admission policy, is subject to the power of the head of the provincial department of education to admit a pupil in excess of the school's admission policy;

(b) further notes that the court has further ruled that in exercising its power, the department has to act in a manner that is procedurally fair and that the SGBs as well as provincial departments and other parties involved must co-operate with each other and work together when grappling to accommodate learners in full classrooms without ignoring the needs and interests of learners;

(2) notes that this ruling confirms the constitutional right of all children to have equal access to quality education and that no child is refused admission to a school based on inferior motives, frivolous, spurious or unfair grounds and that the ruling bars SGBs from safeguarding their own authority instead of placing the interest of the learner first;

(3) calls on all provincial education departments as well as school governing bodies and other parties involved to study the judgment and implement it in a fair manner and in particular to manage the admission process of learners in an amicable and fair manner and in the best interests of learners.

Mr M J R DE VILLIERS

s M W MAKGATE

Mr M J R DE VILLIERS: Deputy Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the DA:

That the Council –

(1) notes that the Department of Social Development underspent R989 million on their 2012-13 budget according to their annual report;

(2) bears in mind that nearly 45% of the population in certain areas of our country are unemployed, that it is a disgrace to underspent on your budget;

(3) further notes that our institutions for older persons, children and abused women have many difficulties in trying to survive, yet a department which must assist and support them, underspent on its budget;

(4) notes that this is clearly a sign of poor political leadership from the side of the ANC government and that it is high time that voters claim value for money for their vote in 2014; and

(5) debates underspending on budgets in government departments.

Mr S H PLAATJIE

Mr M J R DE VILLIERS

Mr S H PLAATJIE: Deputy Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of Cope:

That the Council -

(1) debates the continuing spate of horrifying cases of corruption and fraud in most municipalities of the North West, whose mayors, councillors and majority party leaders continue working and getting paid without being disciplined, setting a bad example for society and future generations;

(2) further notes that the community was appalled when private consultants were used to submit financial statements of all 24 municipalities along with the backlog from previous years. For years, the province's local government structures have come under fire from the Auditor-General, Terence Nombembe, for their poor financial management;

(3) notes that according to Corruption Watch, 22% of reports received from the public implicate municipalities. Cope seeks better governance for the people of the North West province.

[Interjections.]

MOTION WITHOUT NOTICE / C.I / END OF TAKE

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Mr S H PLAATJIE

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Groenewald, can you share the joke?

Mr H B GROENEWALD: Hon Chair, you said you must cut and I said you could take one of the ANC, two of the DA and so on. [Laughter.]

Mrs N W MAGADLA

Mr H B GROENEWALD

KWAZULU-NATAL LEGISLATURE APPOINTMENTS

(Draft Resolution)

Mrs N W MAGADLA: Chairperson, I move without notice:

That the Council-

(1) acknowledges the appointment of Lydia Johnson as KwaZulu-Natal as Provincial Speaker and Sipho Gcabashe as House Chairperson of the legislature;

(2) further acknowledges their contributions to the legislature and the people of KwaZulu-Natal; and

(3) takes this opportunity to congratulate and welcome them to their new positions.

Motion agreed to in accordance with section 65 of the Constitution.

Mr L P M NZIMANDE

Mrs N W MAGADLA

SASCO MAKING STRIDES AT UNIVERSITIES

(Draft Resolution)

Mr L P M NZIMANDE: Chair, I move without notice:

That the Council-

(1) notes that the oldest student movement, the SA Student Congress, Sasco, successor of the SA National Student Congress, the Azanian Students Organization, Azaso, you name them, continues to winsuccesses and victories at tertiary institutions;

(2) further notes that these victories that are achieved are a clear demonstration of confidence in the student leadership of Sasco, an ally of the ANC, in vain to the DA Student Organisation, Ivukana, of today;

(3) acknowledges the victory at the Cape Peninsula University of Technology, CPUT, and the University of Western Cape, UWC, in the Western Cape, which shows that the lies spread about young people in the ANC not caring about their own future is not true; and

(4) takes the opportunity to congratulate Sasco and wish them well in ensuring that they take leadership in the tertiary institutions of South Africa so that the goals of the ANC are further entrenched among the young people of this country.

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Are there any objections to the motion? Yes. In light of the objection the motion may not be proceeded with. The motion without notice will now become notice of a motion.

Mr M P JACOBS

Mr L P M NZIMANDE

TSOSELETSO HIGH SCHOOL LEARNERS ON TWO-WEEK EXCHANGE PROGRAMME IN EDSBYN, SWEDEN

(Draft Resolution)

Mr M P JACOBS: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes that eight learners from Tsoseletso High School in Mangaung in the Free State, left for the City of Edsbyn in Sweden last week on a two-week children's exchange programme;

(2) further notes that this programme resulted from the partnership that was concluded in 2008 between the school and Voxnadalens Gymnasium in Edsbyn;

(3) also notes that it is aimed at broadening the education spectrum of the learners; to engage them with global knowledge; to assist them to become global citizens; and to expose them to challenges faced by learners in other countries;

(4) welcomes this initiative and extends its appreciation to Voxnadalens Gymnasium which is hosting the South African learners and also paying for their travelling expenses; and

(5) takes this opportunity to commend the principal, Mr Tshediso Motlolometsi on his innovation, commitment and dedication to create opportunities for learners to further enrich themselves and broaden their scope.

Motion agreed to in accordance with section 65 of the Constitution.

Mr D V BLOEM

Mr M P JACOBS

SUPPORT FOR BOYCOTT OF E-TOLLS

(Draft Resolution)

Mr D V BLOEM: Deputy Chair, I move without notice:

That the Council-

(1) notes that Cope fully supports all the people of South Africa who are saying that the implementation of e-tolls in Gauteng will hit poor people the most; and

(2) calls upon all people to join Cosatu and other organisations to stage protests and demonstrations, and say no to e-tolls.

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Are there any objections to the motion? Yes. In light of the objection, the motion may not be proceeded with. The motion without notice will now become notice of a motion.

Ms B V MNCUBE: Hon Deputy Chairperson, is it parliamentary for a Member of Parliament to instigate protests? Thank you. [Laughter.]

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Bloem, you know the policies. Hon Mashile, do you want to take to the platform? There is only one Bloem here, from Kroonstad.

Mr D V BLOEM: That's right mama, that's right.

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): You know the policies of Parliament. You know how you should behave in Parliament. You are an old broom. Withdraw your statement.

Mr D V BLOEM: Deputy Chair ...

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Withdraw the instigating part of your motion, please. [Interjections.] Hon Sinclair, I am not talking to you nor am I going to invite you into this debate. [Interjections.] Do you understand?

Mr K A SINCLAIR: No.

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): You don't? Please take him out of the Chamber. [Laughter.] [Interjections.] Take him out of the Chamber, please! There are police outside.You can call them. By the way, hon Bloem, don't repeat that. Please don't instigate. Anyway, your motion has been rejected. Thank you very much and sit down.

Mr D V BLOEM: Okay, mama. Alright, mama. Thank you very much. [Laughter.] [Interjections.]

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon van Lingen, I haven't asked for your help. Please./Mohau//TH

Ms Z C FAKU / End of take

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela)

HAWKERS' PROTEST IN LUSIKISIKI

(Draft Resolution)

Ms Z C FAKU: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes that-

(a) hundreds of hawkers from Lusikisiki in the Eastern Cape have embarked on protest action, since last week, following a decision by the Ingquza Hill local municipality to enforce by-laws aimed at reducing the number of hawkers along the main road of the CBD;

(b) businesses in the town have been forced to close as a result of the protest action; and

(c) motorists driving through the town are being harassed, while municipal officials are being intimidated;

(2) takes this opportunity to call on the mayor and the council to meet with the hawkers as a matter of urgency to seek an amicable solution; and

(3) calls on the Ministers for Co-operative Governance and of Traditional Affairs, Economic Development, and Trade and Industry to monitor and assess the situation, and to intervene urgently, if necessary.

Motion agreed to in accordance with section 65 of the Constitution.

Mr J J GUNDA: Deputy Chairperson, I have a point of order. According to the Rules, motions are allocated 20 minutes, yet we have already spent 35 minutes on this. [Interjections.]

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Hon Gunda, if you are bored, do me a favour: Can you take a walk out, as you usually do? You don't remain in this Chamber for the full session.

Mrs A N D QIKANI

The DEPUTY CHAIRPERSON OF THE NCOP

CONSTRUCTION OF REGIONAL AIRPORT IN SOMERSET EAST

(Draft Resolution)

Mrs A N D QIKANI: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes that-

(a) the Department of Rural Development and Land Reform is in the process of constructing a R143 million regional airport inSomerset East in the Eastern Cape;

(b) construction is expected to be completed in 2014, when the management of the airport will be handed over to the local municipality;

(c) once completed, this airport would be the fifth operational airport in the province;

(d) it is aimed at boosting tourism and commercial activity in the area and will also create several viable job opportunities;

(2) welcomes this development and takes the opportunity to commend the Minister of Rural Development and Land Reform and his department on this development, and on their commitment to deliver on their mandate.

Motion agreed to in accordance with section 65 of the Constitution.

Mr M P SIBANDE

Mrs A N D QIKANI

OPPOSITION TO APPEAL BY URBAN TOLLING ALLIANCE DISMISSED

(Draft Resolution)

Mr M P SIBANDE: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes that-

(a) the Supreme Court of Appeal yesterday, 9 October 2013, dismissed an appeal by the Opposition to Urban Tolling Alliance, Outa, relating to its e-toll challenge against the SA National Roads Agency, Sanral;

(b) in its desperate political expedience and posturing, the DA used every attempt to politicise the Gauteng Freeway Improvement Project, particularly the installation of e-tolls, and did so by contributing about R1 million to Outa's court action and seeking every possible and desperate way to manipulate and mislead the people of Gauteng to support their fabricated campaign;

(c) the Department of Transport published the proposed tariffs for e-tolling in the Government Gazzette yesterday, and the public has 30 days to comment;

(2) welcomes the statement by the Automobile Association of South Africa that this matter should not have been turned into a fight against e-tolls because of their advantages and possible economic spin-offs for South Africa, but about the best ways to ensure that the tariffs do not create a financial oburden to road users; and

(3) takes this opportunity to appeal to the people of South Africa to shun the desperate attempts of those who seek to mislead them for their own political expedience and posturing by using these processes to comment on the proposed tariffs for e-tolls, to engage with the department by making their submissions on the proposed tariffs for e-tolls to find the solution to ensure that the tariffs do not overburden South Africans.

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Are there any objections to the motion? Yes. In light of the objection, the motion may not be proceeded with. The motion without notice will now become notice of a motion.

VISITORS IN GALLERY WELCOMED

The DEPUTY CHAIRPERSON OF THE NCOP (Ms T C Memela): Before I proceed, we welcome all the people in the gallery.

Ms M P THEMBA

The DEPUTY CHAIRPERSON OF THE NCOP

NEWLY BUILT ROAD BETWEEN POLOKWANE AND GIYANI IN LIMPOPO WELCOMED

(Draft Resolution)

Ms M P THEMBA: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes

(a) and welcomes the newly built R81 road between Polokwane and Giyani in Limpopo that was officially opened by President Zuma last week;

(b) that the road that was constructed at a cost of R245 million links Polokwane and Giyani;

(c) that it will also benefit the district municipalities of Capricorn and Mopani, as well as the Polokwane Local Municipality;

(d) that the new R71 road that will link Polokwane and Tzaneen and leads to the Kruger National Park in Limpopo is also under construction; and

(3) takes this opportunity to commend the government under the ANC on its commitment to improve the lives of all, create infrastructure, grow the economy and eradicate the triple challenges of unemployment, poverty and inequality.

Motion agreed to in accordance with section 65 of the Constitution.

Mr M H MOKGOBI

Ms M P THEMBA

REGISTRATION OF CORRECTIONAL SERVICES INMATES FOR ADULT EDUCATION

(Draft Resolution)

Mr M H MOKGOBI: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes-

(a) with appreciation reports by the Department of Correctional Services that inmates register for adult education;

(b) that the Department of Correctional Services indicated that more than 11,600 prison inmates are participating in adult education and training (AET) programmes;

(c) that prisons are now correctional centres for rehabilitation;

(d) that from November 2012 to April 2013, 5 215 offenders were trained in, amongst others, agriculture, business, construction, food services, computers, and welding;

(e) that more than R66 million was allocated for training offenders in scarce skills such as welding, plumbing, bricklaying, plastering, electrical, carpentry, and agricultural skills programmes.

Motion agreed to in accordance with section 65 of the Constitution.

Mrs R M RASMENI

Mr M H MOKGOBI

CLEAN AUDIT ACHIEVED BY DEPARTMENT OF SOCIAL DEVELOPMENT

(Draft Resolution)

Mrs R M RASMENI: Deputy Chairperson, I hereby move without notice:

That the Council-

(1) notes-

(a) reports of a clean audit received by the Department of Social Development for the 2012-13 financial year;

(b) that the Auditor-General found that the department achieved an overall spending rate of 99,1% for the financial year, of which most of the department's annual budget of over R112 billion went towards social assistance;

(c) that social assistance continued to form an important part of the government's strategy to fight poverty, inequality, and unemployment;

(d) that during the year under review, social grant beneficiaries increased to 16,1 million beneficiaries, thus protecting thousands more households and millions of children from abject poverty;

(e) that although the number of beneficiaries had increased, the government had made savings on social grant payments through the SA Social Security Agency's initiatives to clean up fraud through the reregistration process; and

(2) takes this opportunity to applaud the Social Development Department and its entire leadership for the hard work and resolve to help and change the lives of millions of destitute people.

Motion agreed to in accordance with section 65 of the Constitution.

Mr V M MANZINI / Mn// TH / END OF TAKE

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Mrs R M RASMENI

MPUMALANGA RAPIST SENTENCED TO TWO LIFE TERMS FOR RAPING MINORS

(Draft Resolution)

Mr V M MANZINI: Hon Deputy Chairperson, I hereby move without notice:

That the Council –

(1) notes –

(a) that a 41-year-old rapist was sentenced on Tuesday, 8 October 2013, in the Ermelo Regional Court in Mpumalanga, to two life terms for the rape of a10-year-old and that of a 12-year-old who were both his neighbours;

(b) also that the sentences will run concurrently;

(c) further notes that the rapist used to send them to buy bread and on their return invited them into the house, where he raped them;

(d) also that the girls would be given cash not to tell anyone, but eventually the rapist was seen by the neighbours who alerted the parents; and

(2) welcomes the sentence giving hope that it will deter those who were thinking of abusing children.

Motion agreed to in accordance with section 65 of the Constitution.

Mr T E CHAANE

Mr V M MANZINI

WATER SHORTAGES HIT NORTH WEST PROVINCE

(Draft Resolution)

Mr T E CHAANE: Deputy Chairperson, I hereby move without notice:

That the Council –

(1) notes that –

(a) the Premier of North West has declared the province a disaster area as a result of the drought and water shortages in major towns in the province;

(b) the Minister of Water and Environmental Affairs has therefore announced that drastic steps be taken by municipalities and the two water boards in the province to avert the looming water crisis;

(c) among others, the Rustenburg Local Municipality would introduce water restrictions in the central business district, CBD, and in other areas where control is needed and water leaks that have been detected will be repaired;

(d) the Rand Water Board would further be allowed to phase in a restricted water supply plan to local mines to ensure an equitable supply, while the Magalies Water Board is implementing the Pilanesberg Scheme to increase the bulk water supply from the Vaalkop Dam to various areas in Rustenburg and Moses Kotane Local Municipalities;

(e) further notes that other towns would announce their measures shortly while further short and medium-term solutions are considered; and

(2) takes this opportunity to call on all consumers to use water sparingly and responsibly.

Motion agreed to in accordance with section 65 of the Constitution.

Mr F ADAMS

Mr T E CHAANE

PROTECTION OF CITIZENS AGAINST ASBESTOS

(Draft Resolution)

Mr F ADAMS: Deputy Chairperson, I hereby move without notice:

That the Council –

(1) notes that –

(a) although asbestos is no longer mined or used in South Africa, extensive environmental contamination still exists;

(b) workers that demolish and refurbish asbestos structures are potentially at risk of being exposed to it;

(c) South Africa was the third largest producer of asbestos in the world in the 1970s and has a duel legacy of asbestos, namely asbestos-related diseases and also environmental contamination;

(d) the contamination near the former Kuruman asbestos mines in the Northern Cape is quite extensive;

(2) takes this opportunity to call on all local authorities and provincial governments as well as all other role-players and authorities to take all steps necessary to ensure that all citizens are protected from being exposed to asbestos; and

(3) calls on all local authorities and provincial governments also to ensure that all applicable regulations are complied with and that all asbestos waste dumps are properly monitored and managed at all times.

Motion agreed to in accordance with section 65 of the Constitution.

Mr B L MASHILE

Mr F ADAMS

MPUMALANGA SPORTS, CULTURE AND RECREATION DEPARTMENT WINS SATMA AWARD

(Draft Resolution)

Mr B L MASHILE: Deputy Chairperson, I hereby move without notice:

That the Council –

(1) notes –

(a) with appreciation the report that the Mpumalanga Sports, Culture and Recreation Department has won the Best Department of Arts and Culture Award at the 2013 SA Traditional Music Achievement, Satma, Awards;

(b) that in a ceremony held in the Eastern Cape during the past weekend, the department has beaten other provinces in the Arts and Culture category;

(2) takes this opportunity to congratulate the Mpumalanga Department Culture, Sport and Recreation and the entire community of Mpumalanga for this achievement;

(3) conveys the hope that they will continue working hard to promote the arts and preserve the culture of their province; and

(4) calls upon other provinces to do the same and work even harder.

Motion agreed to in accordance with section 65 of the Constitution.

Me C J DE BEER - FIRST ORDER / KC//A N N(ed)/ END OF TAKE

Mr B L MASHILE

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CONSIDERATION OF REPORT OF SELECT COMMITTEE ON FINANCE – AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA AND THE GOVERNMENT OF MAURITIUS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON FINANCE – AGREEMENT BETWEEN THE GOVERNMENT OF SOUTH AFRICA AND THE GOVERNMENT OF SAMOA FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON FINANCE – SUPPLEMENTARY PROTOCOL AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF SOUTH AFRICA AND THE GOVERNMENT OF THE SULTANATE OF OMAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON FINANCE – PROTOCOL AMENDING THE CONVENTION BETWEEN THE REPUBLIC OF SOUTH AFRICA AND THE KINGDOM OF NORWAY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

Mr C J DE BEER: Hon Chairperson, the protocol amending the agreement between the government of the Republic of South Africa and the government of the Republic of Mauritius for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income refers to the following: The international movement of people, capital, goods and other services derives economic benefits. However, it also increases opportunities for tax avoidance and evasion.

In terms of the Organisation for Economic Co-operation and Development, OECD, model, and the Tax Information Exchange Agreements forms the foundation for the vast majority of Tax Information Agreements across the world. The Tax Information Agreements ensures that bank secrecy or absence of domestic tax interest can no longer be used to deny a request for the exchange of information.

Furthermore, tax administrative assistance on tax matters between the states is critical to ensure effective and compliance with tax requirements. This protocol makes provision for taxation on income from immovable assets and income from agriculture and forestry. Each country will decide what immovable assets are, and what can be classified as agriculture and forestry. Tax on business profits is also discussed. The agreements state that if a resident has a business establishment in the other country in a form of a permanent establishment, it should be taxed in that country.

Taxation on international transport also forms part of these Agreements where ships and airplanes from South Africa operating in Mauritius are taxable in South Africa and vice versa. Dividends are taxed according to a common international tax treatment. The country paying the dividend to a nonresident has a limited withholding tax on that nonresident. Countries should assist each other in collecting taxes. Authorities of both countries should arrange revenue claims to be payable by their residents to the other country.

The agreement between the government of the Republic of South Africa and the government of Samoa, through their competent authorities, they shall provide assistance by exchanging information that is foreseeable and relevant to the administration and enforcement of the domestic laws of these countries. The taxes covered by these Agreements include information that is foreseeable and relevant to the determination, assessment, enforcement or collection of tax with respect to persons subject to such taxes, or to the investigation of tax matters or the prosecution of criminal tax matters in relation to such persons.

However, a requested party is neither obliged to provide information which is either held by its authorities nor in the possession of or obtainable by persons who are within its jurisdiction. There are provisions for tax covered by the agreements.

The protocol amending the Agreement between the government of the Republic of South Africa and the government of the Sultanate of Oman for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the supplementary protocol provides amendments to the agreement between the government of the Republic of South Africa and Sultanate of Oman for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income which was signed at Muscat, Oman, on 9 October 2002.

Some articles within the agreement mainly define terms and the core article. Article 3 explains the taxation of dividends paid by companies with the contracting state, stating that dividends paid by the company of the contracting state to residents of other contracting state may not be subjected to double taxation. Paragraph 2 of the article makes provision for the tax rate to be charged. Paragraph 3 makes provision for the exemption of dividends paid by companies which are residents of the contracting state to the government of the other state.

In the case of South Africa, it includes the South African Reserve Bank. Both countries will notify each other in writing when their domestic requirements are completed for the enforcement of the protocol. This protocol will come into effect when taxation on shareholder level of dividends becomes effective in South Africa. Therefore, South Africa will notify the Sultanate of Oman when it has introduced this new system of taxation of dividends.

Lastly, relating to the protocol amending the Convention between the Republic of South Africa and the Kingdom of Norway, the purpose of this agreement is to make sure that South Africa and Norway obtain tax information relating to a resident of the other state. This tax information extends to all kinds of taxes. This is done to prevent tax fraud and evasion in both countries. However, this information should be treated with confidentiality and only be made available to parties involved in the administration of tax matters of the other country.

Those parties can only use this information for administrative purposes. The country supplying information is obliged to give information to the second country, even if it does not have a domestic interest in that particular information. This agreement also makes it clear that the state should not refuse to supply information because it belongs to a private party, for example, a bank or a company. Privately owned information should be attainable on request by the second country.

The Select Committee on Finance, having considered the request for ratification or approval by Parliament on these agreements and protocols between the governments of the Republic of South Africa and the Republic of Mauritius, the government of Samoa, the Sultanate of Oman and the Kingdom of Norway, with respect to taxes and tax matters and for the exchange of information, recommends that the House, in terms of section 231(2) of the Constitution of the Republic of South Africa 1996, approves these Conventions. [Applause.]

Debate concluded.

Question put: That the Report on the agreement between the government of the Republic of South Africa and the government of Mauritius for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

SECOND ORDER

Question put: That the Report on the agreement between the government of South Africa and government of Samoa for the exchange of information relating to tax matters be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

THIRD ORDER

Question put: That the Report on the supplementary protocol amending the agreement between the government of the Republic of South Africa and the government of the Sultanate of Oman for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

FOURTH ORDER

Question put: That the Report on the Protocol amending the convention between the Republic of South Africa and the Kingdom of Norway for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

The Council adjourned at 15:02.

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