Questions and Replies

Reply:

	(a) Minister	(b) Deputy Minister	(c) Any other National Treasury official
(i) Details of each person in department who attended the Rugby World Cup in France in October 2023	No	No	No
(ii) Total number	N/a	N/a	N/a
(iii) (aa) Travel	Nil	Nil	Nil
(iii) (bb) Accommodation	Nil	Nil	Nil
(iii) (cc) Any other related costs	Nil	Nil	Nil

Reply:

1. Table 3.7 (below) of Chapter 3 of the MTBPS provides a breakdown of redemptions for the current year and over the medium term. (a)(b) Government will redeem debt of R155.5 billion in 2023/24, (c) R78 billion has been penciled in for Eskom in 2023/24 (d) the gross borrowing requirement will be raised through the issuance of domestic long term loans, domestic short term loans, foreign loans as well as the drawdown of cash balances (refer To table 3.7 below).

2. Chapter 3 of the 2023 MTBPS states: “... the Minister of Finance will propose tax measures to raise additional revenue of R15 bliion in the 2024 Budget”. In this regard, Budget 2023 will provide details fo measures to be implemented.

Reply:

Government Employees Pension Fund (GEPF)

(1) As of the conclusion of the first quarter of the fiscal year 2023/2024, all state departments and public entities participating in the Government Employees Pension Fund have been diligent in remitting their monthly contributions on behalf of their employees to the Fund. The data indicates that 99.90% of the total monthly pension contributions due were received and reconciled punctually as mandated by the relevant legislation.

(a)

(i) The minor discrepancy of 0.10% does not reflect arrears from any particular state department or public entity but rather pertains to adjustments necessitated by various scenarios such as service termination or changes in service conditions.

(ii) Consequently, there are no specific public entities identified as being in arrears with contributions.

(b) Given the nature of the discrepancy, it does not affect a quantifiable number of employees in a manner that would result from arrears in contributions.

(c) The financial impact represented by the 0.10% discrepancy is being analysed and resolved on a regular basis. The administrator conducts a reconciliation process which is a routine and rigorous part of ensuring compliance and accuracy in the contributions made to the Fund.

(d) To rectify the matter and ensure complete reconciliation:

- A robust process of reconciliation is conducted monthly to address any discrepancies and ensure that contributions reflect the accurate service conditions of all employees.

- Any adjustments required are being handled expeditiously, with a standard resolution timeframe of 30 days.

- Continuous monitoring and engagement with all participating employers are being maintained to ensure timely payment and accurate reporting of contributions, thus fostering a culture of compliance and transparency.

(2) No. All the concerned state departments and public entities have maintained a consistent track record of timely contributions, irrespective of the fiscal situation

South African Revenue Service (SARS)

1. From an employer point of view, SARS pays all statutory contributions on behalf of its employees to third parties such as Government Employees Pension Fund, Medical Schemes and the South African Revenue Service (PAYE, UIF and SDL) in full on a monthly basis. The current CC measures has no negative impact on the monthly commitments for the current staff establishment covered by the grant allocation.

From a Revenue Administration point of view, SARS is responsible for the collection of PAYE, UIF and SDL part of the payroll creditors (contributions) from respective employers. Pension and Medical Aid contributions are paid directly to the respective fund administrators.

(a) Of the 5,303 Departments and Public entities, 4,899 (92%) pay their PAYE, VAT and other tax obligation on time. In observing taxpayer confidentially provision of the Tax Administration Act, we are unable to provide any further specific taxpayer information including the list of the defaulting taxpayers as prompted by the question, it should be noted further that the specific entities can provide directly to the parliamentary oversight bodies such information.

(b) SARS information is limited to Employer account and the defaulting taxpayer debt is at an aggregate entity level. Information on the affected Employees is not yet available from the current Tax Administration data.

(c) The balance of 404 entities (from the total of 5,303) owe SARS R5.9bn in debt for the 2023/24 fiscal year comprised of PAYE R2.4bn, VAT R3.5bn. Of the R5.9bn debt R1bn is under dispute leaving a balance of R4.9bn undisputed of which R2.9bn is older than 3 years.

(d) SARS debt collection processes are employed to follow up on defaulting taxpayers and arrangements made to enforce that the debt is settled within reasonable time where feasible. Engagements with National Treasury to deduct from Grants the necessary amounts to settle taxes owed to SARS have been evoked as the last resort following lack of cooperation or lack of positive response from defaulting taxpayers. It is genuinely concerning for State Organs not to comply with the very tax laws that generate revenue that enables them to exist in order to delivery on their respective mandates of rendering public service to SA citizens who are the taxpaying community.

2. Prior to the Cost Containment measures coming into effect, SARS records have over the years noted an increasing level of Departments and SOCs indebtedness to SARS. There is no correlation between the current Cost Containment measures and the increase in the Departments and SOCs inability to pay their tax obligations over to SARS. This will be monitored closely in the coming months to observe trends post the implementation of the Cost Containment measures.

(a) Not applicable

(b) (i) Not applicable.

(b)(ii) Not applicable

 

Reply:

1. SARS cannot speak to the specifics of a particular case. However, the legal position is that a Public Benefit Organisation (PBO) approved by the Commissioner under section 30 of the Income Tax Act, must conduct one or more Public Benefit Activities (PBAs). These activities are listed in the Ninth Schedule to the ITA. In general, these activities must be conducted in a manner referred to in section 30 of the ITA i.e.

• In a non-profit manner and with an altruistic and philanthropic intent;
• Should not be intended to promote the economic self-interest of anyone beyond reasonable remuneration; and
• Should be widely accessible to the general public at large (not small and exclusive groups).

In determining whether a PBO is conducting the activities as required in law, SARS will consider the merits of each case on the facts and within the framework of the legal provisions available.

2. to reassure the Honourable member that SARS addresses all non-compliance irrespective of who the taxpayer may be without fear, favour or prejudice. Again, SARS cannot speak to the specifics of a particular case. However, where it is discovered that any PBO has contravened the conditions of its approval as stated in law, its exemption will be taken on review and, if necessary, withdrawn and subjected to related tax consequences. All other sanctions available to SARS through the Tax Administration Act also apply to PBOs. Such measures available to SARS include conducting of audits and other administrative actions. In executing its legal mandate, SARS deals with all acts of non-compliance by any PBO without fear, favour or prejudice.

Reply:

The mis-alignment between the budget process and the finalisation of wage agreements has been a feature of South Africa’s public sector remuneration system for many years.

The budget included a 1.5 per cent pay progression increase for civil servants in 2023, which was the baseline that existed at the time, taking into account the projected change in staffing numbers. The National Treasury excluded any further adjustments to compensation of employees to steer clear of pre-empting the outcome of the wage settlement in 2023/24. This was in line with the discussions at the Public Service Labour Summit on collective bargaining, that was convened and attended by both Government and Labour Unions, from 28 to 31 March 2022. It was also agreed in the Summit that parties will work towards the alignment and the timing of the annual budget process, with the PSCBC wage negotiations process for public service employees.

An ideal situation moving forward, as agreed with labour unions, would be to conclude the wage negotiations processes before the finalisation of the budget for the subsequent financial year to ensure the credibility of the fiscal framework.

Reply:

In terms of section 3 of the Preferential Procurement Policy Framework Act (Act No. 5 of 2000 – “the PPPFA”), the “Minister may, on request, exempt an organ of state from any or all the provisions of this Act if –(a) it is in the interest of national security; (b) the likely tenderers are international suppliers; or (c) it is in the public interest.

The Minister, before exempting any organ of state, including State-Owned companies, must receive a request from that organ of state, setting out the reasons for the exemption request, which reasons are limited to the three grounds provided for in the PPPFA, whereupon the Minister must then assess the reasons provided in the application for exemption.

The objects of the PPPFA are to give effect to section 217(3) of the Constitution by providing a framework for the implementation of the procurement policy contemplated in section 217(2) of the Constitution. If organs of state are exempted from the PPPFA, they will not have any basis on which to provide for empowerment objectives in their institutional policies.

With regard to Telkom, it should be noted that Telkom was exempted from the PFMA and PPPFA because the State is no longer the majority shareholder in Telkom.

Reply:

The process of selecting a Strategic Equity Partner for SAA and the subsequent negotiations and conclusion of the terms and conditions for the sale of 51% of SAA’s shareholding was performed by the Department of Public Enterprises.

The National Treasury did not perform any due diligence related to the transaction as it was not subject to section 54(2) of the PFMA. The Minister of Finance’s approval in terms of Section 54(2) of the PFMA was not required for this transaction. Section 54(2) of the PFMA does not find application in this instance as it is the government, as the shareholder selling its stake in SAA. Section 54(2) of the PFMA only finds application where a public entity concludes any of the transactions mentioned under Section 54(2) of the PFMA. In other words, Section 54(2)(c) would apply in an event whereby SAA was seeking to dispose a significant shareholding in any of its subsidiaries or was seeking to acquire significant shareholding in another company.

Reply:

Since the 2020 MTBPS fiscal consolidation measures have been driven by multiple goals: to eliminate the primary fiscal deficit and stabilize debt; support economic growth through fiscal stability and a composition of spending focused on investment rather than consumption; and to protect funding for the most vulnerable. Accordingly, the budget has retained the percentage spent on the social wage at around 60 per cent of the total budget. Government intends to broadly maintain this approach.

In the meantime, and to limit the negative effects of weaker-than-anticipated revenues and more difficult financial conditions, proposed savings and cost-cutting measures are meant to protect the ability of government to sustain the spending on its key service-delivery priorities.

Reply:

The National Treasury noted the presentation made by the Special Investigating Unit (SIU) to the Standing Committee on Public Accountants on Wednesday, 13 September 2023. The National Treasury will comprehensively respond to the matters raised in the referrals by the SIU to the National Treasury, after receipt of the SIU’s final report, including its entire set of supporting documents and annexures. The National Treasury will also fully co-operate with all law enforcement agencies.

Reply:

Various high-level forums of government have been briefed about the fiscal challenges in the current fiscal year and the need for urgent and difficult measures to be taken to forestall their damaging impact during the course of the financial year. This includes briefings and discussions at Cabinet, the Minister’s Committee on the Budget, the Budget Council, the Forum of South African Directors-General (FOSAD), and the Technical Committee for Finance, which is a committee of Provincial Treasuries. In addition, the National Treasury has publicly highlighted the difficult financial constraints facing government and its implications during a meeting of NEDLAC as well as in the 2024 Medium-Term Expenditure Framework (MTEF) budgeting guidelines, which are published on the website of the National Treasury.

In all of these engagements, the National Treasury emphasized that measures will be required to achieve savings, improve efficiency and contain costs.

Reply:

Payments not made within 30 days are in breach of the Municipal Finance Management Act and the oversight over compliance to laws and regulations is that of the Municipal Council. Therefore, the questions should be directed to the respective municipalities as these relate to contractual obligations entered between municipalities and their respective service providers.

The National Treasury has not conducted research or an assessment on the adverse impact of late payments. The Department of Small Business Development has a mandate to promote and develop Small, Micro and Medium Enterprises (SMMEs). It is therefore suggested that the Honourable Member directs this enquiry to them.

Reply:

One of the key components of the budget is the economic development function, through which funds are allocated to promote sustained and inclusive economic growth, and to address unemployment, poverty and inequality. The various areas of spending include economic infrastructure, industrialisation and exports, innovation, science and technology, agriculture and rural development and job creation. Details of the expenditure are included in the budget documents of the past three years.

The economic recovery plan announced in October 2020 links infrastructure investment and related institutional reforms to support higher economic growth. Government has made progress in implementing the economic recovery plan including in the electricity and transport sectors, roll out of critical infrastructure in water and sanitation, energy and transport as well as the presidential employment initiative.

Public-sector infrastructure expenditure increased from R187.4 billion in 2019/20 to R212.3 billion in 2021/22, and an estimated R255.2 billion in 2022/23. These funds were mainly used to expand power generation capacity, upgrade and expand the transport network, improve sanitation and water services and for social services infrastructure.

Since the inception of the budget facility for infrastructure, a total of R56.8 billion has been approved and allocated to the relevant infrastructure projects, including Limpopo Central Hospital, Gauteng Schools Programme, SA Connect, and Rural Bridges Programme. Since inception, the Infrastructure Fund has helped to package and approve 13 blended finance projects and programmes to the value of R48.8 billion.

Government is working on several reforms to strengthen public investment management and the associated value chain. Many of these involve pooling resources with the private sector in blended finance initiatives aimed at funding and implementing infrastructure projects more effectively.

Reply:

1. In line with the findings and recommendations of the Nugent Commission of Inquiry, SARS has implemented an improved integrated and collaborative enforcement approach to address issues related to Illicit Financial Flows (IFFs). Various units operating collaboratively have been established to provide a credible response to the threat/risk brought about by IFFs in line with the SARS strategy, to make it hard and costly for taxpayers and traders who do not want to comply. They include:

• STCC, which deals with Syndicated Tax and Customs Crime;
• CI, which deals with criminal investigations involving tax and customs crimes;
• LBI dealing with Large Business and International;
• PIRE dealing with Priority Individuals and Related Entities;
• HWI dealing with High Wealth Individuals and;
• Specialised Audit.

2. All allocations are determined as part of the budget process. If a court decides that recovered money must go into the Criminal Assets Recovery Account (CARA), then funding is allocated in terms of Section 69A of the Prevention of Organised Crime Act of 1998 (POCA) that provides for the allocation of funds to law enforcement agencies and organisations rendering assistance in any manner to victims of crime.

Section 65 of POCA establishes a Criminal Assets Recovery Committee (CARC), which is responsible for providing Cabinet with recommendations on the utilisation of money deposited into CARA and providing advice on specific issues related to the criminal assets recovery process. It consists of the Ministers of Justice and Correctional Services (MoJCS - Chairperson), Police and Finance, the National Director of Public Prosecutions, and, if necessary, two other persons designated by the MoJCS.

3. (a) SARS, like any other entity/department which requires funding from the fiscus, participates in the budget process through which funds are allocated for different priorities and programmes of government.

(b) In 2019, SARS established the Liaison Unit with the aim to strengthen whole-of government collaboration but, particularly, with the law enforcement agencies, the FIC, the AFU, and SARB. This includes:

• Exchanging taxpayer and customs information lawfully;
• Collaboratively executing investigations and prosecutions;
• Sharing resources like people, data, and technology to enhance efficient and effective expenditure by agencies in support of national compliance generally and tax compliance in particular.

 

Reply:

a) What is the total number of transactions that have been concluded since the launch of the blended finance with the Land Bank in October 2022?

The total number of approved transactions as at 31 Aug 2023: 71

Total value of approvals as at 31 Aug 2023: R591.3 million (R279.9 million of loans, and R311.4 million of grants)

Total disbursements amount as at 31 Aug 2023: R153 million (R77 million of loans, and R76 million of grants)

b) For which commodities were the transactions?

Commodities of Approved Transactions as at 31 August 2023
Avocados	Nuts (Macadamia and pecan nuts)
Bananas	Poultry
Dry Beans	Raisins
Citrus	Sugarcane
Grains and Oilseeds	Table Grapes
Livestock (Red meat)	Vegetables

 

(c) What are the reasons that there have been delays in finalising incomplete transactions, including those of acquiring livestock farms?

(i) Reasons for delays in finalizing applications

1. Clients not submitting all the required application information simultaneously. The quality and accuracy of business and financial information contributes to the waiting time during which the processing of the transactions are paused until all the critical information is submitted.

2. Applications not viable and financial projections indicative of the business’s inability to service the loan – at times this leads into the submissions being reworked by the clients.

3. Lack of adherence to environmental and regulatory requirements such as environmental impact assessments, sufficient water volumes and water licenses. These issues generally take long to resolve, and are handled externally by the client through the relevant government departments. The application cannot be finalised without these matters being confirmed.

4. Poor credit records where clients need to resolve defaults and judgements prior to the application being taken forward.

5. Insufficient grazing capacity or applications with overgrazing where access to additional parcels of land are not easily accessible. The application will therefore be delayed as a result.

6. Intermittent capacity constraints and high volume of applications. Some of the Bank’s provincial offices were constrained to turn the transactions around at speed due to vacancies that are currently being field.

(ii) Delays in processing disbursements

Delays in clients meeting the funding conditions which need to be fulfilled prior to disbursement of funds. These include the following: Delays experienced in clients obtaining licences for additional water rights from the Department of Water and Sanitation. Delays in obtaining the condition for provision of DALRRD’s written consent to cede all and any of the rights of the Borrower under the 30-year lease agreements. There are often delays where the client is required to provide Life Cover / Credit Life as clients undergo medical examination, and in some instances the clients may not qualify. The conversion of letters of intent to the required off-taker agreements may take longer to obtain. Title deeds in some of the provinces have restrictive clauses on selling to external buyers that are not from the location.

Reply:

(1)(a) Creditors with outstanding invoices have been encouraged to escalate matters to the National Treasury through the helpdesk facilities, [email protected], and [email protected], respectively. These are followed up with the respective Municipal Manager and Chief Financial Officer. Copies are also forwarded to the relevant provincial treasuries for their additional oversight, monitoring and facilitation of engagements with the relevant municipality, where required.

(1) (b) Section 65(2)(e) of the Local Government: Municipal Finance Management Act, 2003 (MFMA), requires the Accounting Officer to take all reasonable steps to ensure that all money owing by the municipality be paid within 30 days of receiving the relevant invoice or statement. The National Treasury has issued MFMA Circular 49 which includes a step-by-step approach to be adopted by municipalities to ensure that they consistently fulfil their financial obligations. Additionally, National Treasury has issued standard operating procedures for municipalities in relation to expenditure and liabilities management. These matters are also addressed when requested to develop Financial Recovery Plans.

(2) (a) The National Treasury publishes regular reports as required by section 71 of the MFMA. The latest publication of the Local Government Revenue and Expenditure: Fourth Quarter Local Government Section 71 Report, for the period 1 July 2022 to 30 June 2023, reflects amounts owed by municipalities to creditors for more than 30 days of R75,9 billion for the 4th Quarter of the financial year. The details of which, are available on the National Treasury website.

(2)(b) Accountability arrangements in the MFMA requires the Municipal Council and the Municipal Manager to take disciplinary action against officials responsible for non-compliance with internal control measures.

Reply:

1. (a) & (b)

There is no official proposal to introduce a new BRICS currency at this point.

The current discussion on facilitating trade and finance amongst the BRICS members is captured in the Johannesburg Declaration where BRICS Leaders highlighted the following:

“We stress the importance of encouraging the use of local currencies in international trade and financial transactions between BRICS as well as their trading partners. We also encourage strengthening of correspondent banking networks between the BRICS countries and enabling settlements in the local currencies. We task our Finance Ministers and/or Central Bank Governors, as appropriate, to consider the issue of local currencies, payment instruments and platforms and report back to us by the next Summit”.

In the BRICS Finance Track, Finance Ministers and Central Bank Governors will resume discussions regarding the instruction from the leaders to explore payment instruments and infrastructure of using local currencies for enhance trade.

2. As stated before, BRICS countries are not establishing a BRICS common currency.

To date, the United States and the European Union remain one of the largest trading partners of South Africa. South Africa trade relations with the United States and the European Union are governed by existing trade agreements with these trading partners. Any changes in the trade agreements are negotiated and agreed between the two countries.

Reply:

The DBSA has seventy tourism-related projects, of which twenty-two have been completed, and forty-eight are in various stages of execution.

The detailed project list, which includes details (question (a)-(h)) is listed below.

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date ( e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
1	NW	Compliance Certificates	NW Lehurutshe Bird and Trophy Hunting owned by the Bakgatla ba Lencoe Trust	2020-12-07	Construction	Construction	2024-03-22	2024-03-22	Not Applicable	R28,209,243.11	R1,176,025.47
2	KZN	Compliance Certificates	KZN Isibhubhu Project	2020-12-07	Construction	Construction	2023-09-16	2023-11-15	Slow performance of the contractor at commencement due to cash constraints and material sourcing challenges. The DBSA loan facility to the contractor has assisted in procurement of material and the performance of the contractor has improved as they are recovering to complete on time. Suspension of works due to the yearly traditional reed dance for a week was the latest stoppage. Delay also caused by client request for change in design for the maidens change rooms.	R35,470,271.15	R13,489,181.26
3	KZN	Compliance Certificates	KZN Muzi Pan Project	2020-12-07	Concurrence	Procurement - Concurrence Requested	2024-06-13	2024-06-13	Not Applicable	R21,899,635.05	R578,852.36
4	MP	Community Tourism Projects	Numbi Gate - Nkambeni Safari Lodge	2020-12-07	Construction	Construction	2024-03-26	2024-03-26	Delays in commencement of the project due to community social issues and currently a land claim.	R24,563,693.62	R2,659,306.92
5	MP	Community Tourism Projects	Numbi Gate - Mdlhuli Safari Lodge	2020-12-07	Construction	Construction	2024-03-26	2024-03-26	Delays in commencement of the works due to the delays in appointment of the CLO and labour	R33,554,531.24	R3,455,932.19
6	LP	Community Tourism Projects	Nandoni Dam	2020-12-07	Construction	Construction	2024-05-16	2024-05-16	Not Applicable	R38,982,441.65	R1,738,488.51
7	LP	Community Tourism Projects	Tshathogwe Game Farm	2020-12-07	Construction	Construction	2023-09-09	2023-11-14	Poor performance of the Contractor. Penalties to be charged in accordance with contract.	R26,741,416.87	R9,476,563.90

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
8	LP	Community Tourism Projects	Mtititi Game Farm	2020-12-07	Construction	Construction	2023-06-10	2023-12-31	Poor performance of the Contractor. Penalties to be charged in accordance with contract.	R27,898,562.18	R14,455,737.46
2023-12-31	LP	Community Tourism Projects	Mapate Recreational Social Tourism Facility	2020-12-07	Construction	Construction	2023-06-16	2023-12-31	Suspension of works due to fatality on site, Poor performance by contractor at commencement of the constructions works.	R27,450,164.53	R9,245,260.80
2023-12-31	KZN	Local Community Museums	Product Enhancement at Anton Lembede Museum eThekwini Municipality (KZN)	2021-02-08	Construction	Construction	2024-03-02	2024-03-02	Not Applicable	R23,611,547.91	R979,096.02
11	NC	Local Community Museums	Product Enhancement at McGregor Museum (NC) WP1	2021-02-08	Evaluation	Procurement - Evaluation	2024-06-16	2024-06-16	Not Applicable	R240,750.00
12	NC	Local Community Museums	Product Enhancement at McGregor Museum (NC) WP2	2021-02-08	Evaluation	Procurement - Evaluation	2024-04-15	2024-04-15	Not Applicable
13	KZN	Local Community Museums	Product Enhancement at AmaHlubi Cultural Heritage (KZN)	2021-02-08	Concept NDT	Planning and Design	2024-03-11	2024-03-11	Not Applicable	R8,228,848.39	R979,069.02
14	NW	Local Community Museums	Product Enhancement at Sol Plaatjie Museum (NW)	2021-02-08	Construction	Construction	2024-02-01	2024-02-01	Delay in commencement of works due to an impasse on works to be implemented (new and maintenance work). Meeting between NDT, DBSA and Mahikeng Municipality to be held on 20.09.2023 to find way forward on scope.	R8,228,848.31	R832,007.41

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4), Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date ( e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
15	NW	Local Community Museums	Product Enhancement at Lehurutshe Liberation Heritage Museum	2021-02-08	Concept NDT	Planning and Design	2024-02-27	2024-02-27	Not Applicable	R15,384,460.00	R832,007.41
16	NC	lndi-Atlantic Route (Coastal and Marine Tourism initiatives)	Tourism development at Orange River Mouth (NC) as part of the Indi-Atlantic Route	2021-02-08	Design Development	Planning and Design	N/A	N/A	Project works to be completed till Design Stage. Further stages will await NDT instruction to Proceed.	R76,121,200.33	R949,421.57
17	EC	lndi-Atlantic Route	Tourism Development at Hole in the Wall (EC) as part of the Indi-Atlantic Route	2021-02-08	Design Development	Planning and Design	N/A	N/A	Project works to be completed till Design Stage. Further stages will await NDT instruction to Proceed.	R56,103,208.95	R1,760,791.87
18	KZN	lndi-Atlantic Route	Tourism development at Harold Johnson Nature Reserve as part of the Indi-Atlantic Route	2021-02-08	Design Development	Planning and Design	N/A	N/A	Project works to be completed till Design Stage. Further stages will await NDT instruction to Proceed.	R48,708,342.83	R1,443,770.69
19	GP	Maintenance & Beautification	Suikerbosrand Nature Reserve, Gauteng	2020-12-07	Evaluation	Procurement - Evaluation	2024-03-20	2024-03-20	Not Applicable	R8,733,665.78	R257,326.41
20	KZN	Maintenance & Beautification	J L Dube Precinct, KZN	2020-12-07	Design Development	Planning and Design	2023-11-27	2023-11-27	Not Applicable	R4,277,257.82	R37,527.79
21	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Gariep Dam Resort, Free State	2020-12-07	Construction	Construction	2023-09-14	2023-12-31	The contractor is behind schedule. Penalties to be charged in accordance with contract.	R4,999,748.71	R2,182,007.88

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
22	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Maria Moroka Resort in Thaba Nchu, Free State	2020-12-07	Construction	Construction	2023-09-15	2023-12-31	The contractor is behind schedule. Penalties to be charged in accordance with contract.	R4,999,748.71	R894,648.15
23	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Phillip Saunders Resort in Bloemfontein, Free State	2020-12-07	Construction	Construction	2023-08-15	2023-12-31	Additional scope of work requested by the end user Client and extension of time under review to determine the completion date.	R4,999,748.71	R2,637,239.48
24	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Sterkfontein Dam Nature Reserve, Free State	2020-12-07	Construction	Construction	2023-08-14	2023-12-31	The contractor is behind schedule. Penalty to be charged in accordance with contract.	R4,999,748.71	R2,967,908.65
25	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Manyeleti Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R2,922,378.71
26	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Andover Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,476,227.74
27	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Songimvelo Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,801,835.77
28	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	SS Skosana Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,089,137.42

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status (c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
22	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Maria Moroka Resort in Thaba Nchu, Free State	2020-12-07	Construction	Construction	2023-09-15	2023-12-31	The contractor is behind schedule. Penalties to be charged in accordance with contract.	R4,999,748.71	R894,648.15
23	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Phillip Saunders Resort in Bloemfontein, Free State	2020-12-07	Construction	Construction	2023-08-15	2023-12-31	Additional scope of work requested by the end user Client and extension of time under review to determine the completion date.	R4,999,748.71	R2,637,239.48
24	FS	Maintenance & Beautification of Provincial State-Owned Attractions.	Sterkfontein Dam Nature Reserve, Free State	2020-12-07	Construction	Construction	2023-08-14	2023-12-31	The contractor is behind schedule. Penalty to be charged in accordance with contract.	R4,999,748.71	R2,967,908.65
25	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Manyeleti Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R2,922,378.71
26	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Andover Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,476,227.74
27	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	Songimvelo Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,801,835.77
28	MP	Maintenance & Beautification of Provincial State-Owned Attractions.	SS Skosana Nature Reserve, Mpumalanga	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	2023-06-08	Not Applicable	R3,736,433.94	R3,089,137.42

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date ( e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
29	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Thomas Baines Nature Reserve, Eastern Cape	2020-12-07	Construction	Practical Completion Achieved	2023-08-08	2023-09-14	Certain areas on site were put on hold due to environmental concerns which did not form part of the scope. Practical completion has been achieved.	R4,285,162.35	R3,415,779.54
30	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Hluleka Nature Reserve, Eastern Cape	2020-12-07	Concept To be Approved	Planning and Design	2023-12-27	2024/25FY	Not Applicable	R4,185,939.39	R83,973.60
31	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Double Mouth Nature Reserve, Eastern Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-06	N/A	Not Applicable	R3,528,146.03	R2,859,541.75
32	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Oviston Nature Reserve, Eastern Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-25	2023-09-01	Project was affected by the hunting season as the contractor had limited access to site, hence the delay in completion against the baseline PC date. The project has achieved practical completion.	R3,504,584.39	R2,622,218.39
33	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Baviaanskloof Nature Reserve, Eastern Cape	2020-12-07	Construction	Construction	2023-07-25	2023-10-31	Change in the design of the kitchen building and location allocated by the end user.	R3,528,146.03	R2,182,741.34
34	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Cwebe and Dwesa, Eastern Cape	2020-12-07	Construction	Construction	2023-12-01	2023-12-01	Delays in granting contractor access to all facilities on site due to a movie recording or filming.	R4,263,982.64	R888,768.16
35	EC	Maintenance & Beautification of Provincial State-Owned Attractions.	Mpofu and Fordyce Nature Reserve, Eastern Cape	2020-12-07	Construction	Construction	2023-12-02	2023-12-02	Delay on works as some facilities had to be put on hold to accommodate the hunting season which generates revenue for the reserve.	R4,263,982.64	R1,502,586.19

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date ( e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
36	NC	Maintenance & Beautification of Provincial State-Owned Attractions.	Doornkloof Nature Reserve, Northern Cape	2020-12-07	Construction	Construction	2023-11-23	2023-11-23	Not Applicable	R5,254,310.06	R1,235,877.71
37	NC	Maintenance & Beautification of Provincial State-Owned Attractions.	Rolfontein Nature Reserve, Northern Cape	2020-12-07	Construction	Construction	2023-11-23	2023-11-23	Not Applicable	R5,254,310.06	R1,686,739.19
38	NC	Maintenance & Beautification of Provincial State-Owned Attractions.	Goegap and Witsand Nature Reserve, Northern Cape	2020-12-07	Construction	Construction	2023-11-23	2023-11-23	Not Applicable	R5,254,310.06	R3,410,098.70
39	LP	Maintenance & Beautification of Provincial State-Owned Attractions.	Makapans Valley WHS, Limpopo	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	N/A	Not Applicable	R3,145,623.58	R2,997,834.07
40	LP	Maintenance & Beautification of Provincial State-Owned Attractions.	Nwanedi Nature Reserve, Limpopo	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	N/A	Not Applicable	R3,145,623.58	R2,558,202.70
41	LP	Maintenance & Beautification of Provincial State-Owned Attractions.	Blouberg Nature Reserve, Limpopo	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	N/A	Not Applicable	R3,145,623.58	R2,465,052.22
42	LP	Maintenance & Beautification of Provincial State-Owned Attractions.	Musina Nature Reserve, Limpopo	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	N/A	Not Applicable	R3,145,623.58	R2,777,971.87

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
43	LP	Maintenance & Beautification of Provincial State-Owned Attractions.	Modjadji Nature Reserve, Limpopo	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-16	N/A	Not Applicable	R3,145,623.58	R2,430,597.23
44	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	Kogelberg Nature Reserve, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R3,003,843.38
45	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	Goukamma Nature Reserve, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R2,527,332.95
46	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	Lookout Hill Khayelitsha, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R3,277,649.65
47	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	De Hoop Nature Reserve, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R2,026,649.36
48	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	Wolwekloof Nature Reserve, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R3,072,463.11
49	WC	Maintenance & Beautification of Provincial State-Owned Attractions.	Cederberg Wilderness Area, Western Cape	2020-12-07	Practical Completion	Practical Completion Achieved	2023-06-14	N/A	Not Applicable	R3,634,316.46	R1,946,132.58
No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
50	NW	Maintenance & Beautification of Provincial State-Owned Attractions.	Mafikeng Hotel School	2022-04-04	Concept NDT	Planning and Design	2024-09-12	2024/25FY	Not Applicable
51	NW	Maintenance & Beautification of Provincial State-Owned Attractions.	Pilanesberg Nature Reserve, North West	2022-04-04	PSP Appointment	Pre-Initiation	2024-06-11	2024/25FY	Not Applicable
52	NC	Construction Planning, Procurement & Implementation	NC Platfontein Lodge	2020-12-07	Concept	Planning and Design	2023-12-27	2024/25FY	Not Applicable	R36,944,350.33	R464,114.63
53	NW	Further detailed planning & construction	NW Lotlamoreng Dam	2020-12-07	Tender / Retender	Procurement - Contractor	2024-02-11	2024/25FY	Not Applicable	R21,680,806.49	R392,300.67
54	NW	Construction Planning, Procurement & Implementation	NW Manyane Lodge	2020-12-07	Evaluation	Procurement - Evaluation	2023-11-02	2024/25FY	Not Applicable	R25,788,890.01	R392,300.67
55	LP	Construction Planning, Procurement & Implementation	LP Matsila Lodge	2020-12-07	Construction	Construction	2023-12-14	2023-12-14	Contractor is running behind schedule due to cashflow constraints on purchasing the high value items. DBSA has approved a loan facility and is assisting the contractor with purchasing of the material.	R43,036,821.09	R9,940,053.98
56	LP	Construction Planning, Procurement & Implementation	LP Phiphidi Waterfall	2020-12-07	Construction	Construction	2024-03-16	2024-03-16	Not Applicable	R24,984,745.91	R1,258,843.25

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
57	LP	Construction Planning, Procurement & Implementation	LP Oaks	2020-12-07	Construction	Construction	2024-02-07	2024-02-07	Not Applicable	R30,540,765.25	R6,582,104.00
58	LP	Construction Planning, Procurement & Implementation	LP Ngove	2020-12-07	Construction	Construction	2024-05-19	2024-05-19	Not Applicable	R35,488,790.91	R1,951,886.39
59	LP	Construction Planning, Procurement & Implementation	LP Tisane	2020-12-07	Construction	Construction	2023-12-24	2023-12-24	The Contractor had cashflow constraints that affected purchasing of material. The DBSA has approved a loan facility and the material has already been provided to the contractor.	R32,500,362.51	R10,759,639.31
60	LP	Further detailed planning & construction	LP Vhatsonga	2020-12-07	Evaluation	Procurement - Evaluation	2024-04-11	2024/25FY	Not Applicable	R34,509,658.61	R1,164,067.68
61	FS	Construction Planning, Procurement & Implementation	FS QwaQwa Guesthouse	2020-12-07	Construction	Construction	2023-09-18	2023-10-30	The design of the sewer had to be changed by engineers.	R24,619,623.73	R20,195,710.68
62	FS	Construction Planning, Procurement & Implementation	FS Infrastructure through Monontsha	2020-12-07	Practical Completion	Practical Completion Achieved	2023-09-18	N/A	Not Applicable	R7,852,914.40	R5,605,553.72
63	FS	Construction Planning, Procurement & Implementation	FS Vredefort Dome	2020-12-07	Construction	Construction	2023-10-17	2024/25FY	Contract Terminated due to poor performance of the contractor	R28,163,338.17	R7,165,192.19

No	Province	Work Package	Project Name (a)	Date IPW signed off by NDT to DBSA (b)	Status ( c)	Current Status (Planning & Design stage 1-3, Procurement (stage 4),Construction Stage 5, Close Out (stage 6-7)	Baseline Targeted Practical Completion & Occupation Date (d)	Actual & revised Practical Completion & Occupation date (e)	Comments on Delays & targets not being met (pls be precise to the point) (f)	Total Budget (PSP, Construction, DBSA Fees) (g)	Actual Total Expenditure as at End August 2023 (h)
64	NC	Construction Planning, Procurement & Implementation	NC Kamiesberg Tourism Development	2020-12-07	Design Development	Planning and Design	2024-04-15	2024/25FY	Not Applicable	R19,816,186.00	R1,016,253.44
65	EC	Construction Planning, Procurement & Implementation	EC Maluti Hiking and Horse Trail	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-07	N/A	Not Applicable	R21,953,838.99	R21,099,619.33
66	EC	Construction Planning, Procurement & Implementation	EC Mthonsi Lodge	2020-12-07	Construction	Construction	2023-11-14	2023-11-30	Delay due to inclement weather. EOT approved	R7,563,919.96	R20,649,930.73
67	EC	Construction Planning, Procurement & Implementation	EC Qatywa Eco Tourism Development	2020-12-07	Construction	Construction	2024-01-16	2024-03-12	Delay due to inclement weather. EOT approved	R39,654,075.62	R18,654,465.84
68	EC	Construction Planning, Procurement & Implementation	EC Chalets at Nyandeni Great Place	2020-12-07	Practical Completion	Practical Completion Achieved	2023-08-15	N/A	Penalties charged to contractor for late completion	R22,996,656.27	R20,600,239.42
69	EC	Construction Planning, Procurement & Implementation	EC Western Thembuland	2020-12-07	Practical Completion	Practical Completion Achieved	2023-07-07	N/A	Not Applicable	R28,333,432.75	R26,545,363.06
70	LP	Construction Planning, Procurement & Implementation	Royal Khalanga Lodge	2021-09-13	Construction	Construction	2024-03-25	2024-03-25	Not Applicable	R17,772,742.44	R2,409,864.34

Reply:

Section 5 of the Preferential Procurement Policy Framework Act (Act No. 5 of 2000 – “the Act”) states that the Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act. The judgement of the Constitutional court was that the impugned regulations 3,4 and 9 of the 2017 Regulations amounted to determining preferential procurement policy which was the responsibility of the organ of state in terms of Section 2(1) of the Act. The Minister made the Preferential Procurement Regulations 2022 in line with the Constitutional Court judgement to prescribe what is necessary or expedient in order to achieve the objects of the Act.

It is important to note that the Constitutional Court did not rule that State-Owned Companies can make their own regulations as that would be going against what the Act provides, but it did rule that each organ of state is empowered to determine its own preferential procurement policy (in terms of section 2(1) of the Act) and that these policies must still comply with the Act, which includes the 2022 Regulations.

Reply:

(i) NATIONAL TREASURY

Financial years	(a) Total amount	(b) Name of supplier	(c) Total number of copies printed
(aa) (i)(ii) 2020-21	The Annual Report was not printed.
(bb) (i)(ii) 2021-22	R87 845,28	Lebone Litho Printers	120
(cc) (i)(ii) 2022-23	Not in printing process yet.

(ii) ENTITIES

1. Accounting Standards Board (ASB)

From the Accounting Standards Board

We do not print our Annual Report/Integrated Report/Annual Financial Statements. All our reports are made available electronically.

2. Co-operative Banks Development Agency (CBDA)

Reference	Financial Year	Amount Paid	Copies	Supplier
2742(a)(aa)	2020-21	Nil	Nil	Not Applicable
2742(a)(bb)	2021-22	Nil	Nil	Not Applicable
2742(a)(cc)	2022-23	Nil	Nil	Not Applicable

3. Development Bank of Southern Africa (DBSA)

4. Financial Intelligence Centre (FIC)

(a) (ii) (aa) 2020-21 – R0

(bb) 2021-22 – R0

(cc) 2022-23 – R0

(b) Not applicable

(c) (i) and (ii) Not applicable. The Financial Intelligence Centre did not produce printed copies of its annual reports in the 2020-21, 2021-22 and 2022-23 financial years.

5. Financial Sector Conduct Authority (FSCA)

(a) The total amount (ii) Financial Sector Conduct Authority (FSCA) printed copies of the annual reports in;

(aa) 2020 – 2021: 150 total copies

RP292/2021

ISBN: 978-0-621-49765-6

Title of Publication: Annual Report 2020/2021 Financial Sector Conduct Authority (FSCA)

Printing costs: R44 676.35

Supplier: Shereno Printers

(bb) 2021 –2022: 150 total copies

RP282/2022

ISBN: 978-0-621-50641-9

Title of Publication: Annual Report 2021/2022 Financial Sector Conduct Authority (FSCA)

Printing costs: R47 356.93

Supplier: Shereno Printers

(cc) 2022 – 2023: 150 total copies

RP249/2023

ISBN: 978-0-621-51379-0

Title of Publication: Integrated Report 2022/2023 Financial Sector Conduct Authority (FSCA)

Amount spent: R34 859.59

Supplier: Blackmoon

NB: The 2022/2023 report has not been printed. The figures provided are based on the quotation received from the service provider.

5. Government Employees Pension Fund (GEPF)

7. Government Pensions Administration Agency (GPAA)

(i) Not Applicable to the GPAA

(ii) The table below sets out the amount the GPAA paid for printed copies of the integrated annual reports, the utilised service provider and printed the number of copies in the respective years:

Financial Year	Service Provide	Number of Copies	Amount
(aa) 2020-21	Ulutsha Communication	200	R30 000.00
(bb) 2021-22	Ulutsha Communication	500	R77 250.00
(cc) 2022-23	No expenditure incurred to date

8. Government Technical Advisory Centre (GTAC)

(aa) R17908.95, 40 copies printed.

(bb) R10519.05, 25 copies printed.

(cc) R0, no copies printed.

(b) Grounded Media supplied printed copies in each case.

(c) 65 copies were printed in total.

(i) 40 copies printed in (ii) 2020-21 and 25 copies in 2021-22. No copies have been printed in 2022-23.

9. Independent Regulatory Board for Auditors (IRBA)

10. Land and Agricultural Development Bank of South Africa (Land Bank)

1. Land Bank has not printed Integrated Annual Reports for FY2020-21, FY2021-22, and FY2022-23. The Bank has only produced electronic versions of the Integrated Annual Reports for the specified period.
2. Land Bank did not procure any suppliers for the printing of the Integrated Annual Reports.
3. No Integrated Annual Reports were printed by the Bank.

11. Office of the Ombud for Financial Services Providers (FAIS Ombud)

Integrated Reports:

The FAIS Ombud has incurred no expenditure with respect to Integrated Annual Reports for the financial periods 2020-21 to 2022-23.

Annual Reports:

Annual expenditure incurred by the Office on the publication of annual reports for the financial periods 2020-21 to 2022-23 is as follows:

NO	Financial Period	Service Provider	No. of Copies	Amount
1.	2020-21	Lebone Litho Printers	150	R54,353.45
2.	2021-22	Litha Communications	150	R96,340.68
3.	2022-23	Lezmin 2771 CC	50	*R83,317.60

* Amount as per signed purchase order. As at 4 September 2023, the payment for the 2022-23 annual report has not been processed.

12. Office of the Pension Funds Adjudicator (OPFA)

Question	2020-21(aa)	2021-22(bb)	2022-23(cc)
(a)	R112 299.62	R99 690.05	R122 245.00
(b)	Broadsword Communication	Broadsword Communications	Seriti Printing Digital
(c)	100 printed copies (Including design and editing)	100 printed copies (Including design and editing)	100 printed copies (Including design and editing)

13. Office of the Tax Ombud (OTO)

14. Public Investment Corporation SOC Ltd (PIC)

(a)(ii)

(aa) 2020/21 Book one: Integrated Annual Report at a cost of R84 500 (excluding VAT); and Book two: Annual Financial Statements at a cost of R55 643.50 (excluding VAT).

(bb) 2021/22 Book one: Integrated Annual Report at a cost of R93 705 (excluding VAT); and Book two: Annual Financial Statements at a cost of R65 015 (excluding VAT).

(cc) 2022/23 Book one: Integrated Annual Report at a cost of R131 400 (excluding VAT); and Book two: Annual Financial Statements at a cost of R58 200 (excluding VAT).

(b)

(b) Msomi Africa Communications was the supplier for all three of the above-mentioned financial years.

(c)

(i) and (ii)

2020/21 700 copies printed

2021/22 500 copies printed

2022/23 800 copies printed

15. Sasria SOC Ltd

2020-2021: R29,500-00 (Exl VAT); Msomi Africa Communication (PTY) Ltd; 100 printed copies [R295-00/copy]

2021-2022: Quoted R11,800-00 (Exl VAT); Msomi Africa Communication (PTY) Ltd; 30 printed copies [R393-33/copy]

2022-2023: Not yet finalized

16. South African Revenue Service (SARS)

a) (ii) (aa) (bb) (cc) SARS did not print annual reports for the 2020 – 2021 financial years. The annual report was only printed for the 2022-23 financial year at the total amount of R140 000.

b) The supplier who was appointed for SARS annual report printing is Shereno Printers.

c) (i) (ii) The total number of copies that were printed was 250 for the 2022-23 financial year.

Reply:

Illicit financial flows (IFFs) take a variety of forms and are addressed by several bodies, including SARS. SARS takes action with respect to IFFs that have a tax or customs aspect in terms of the Income Tax Act, 1962, Customs and Excise Act, 1964, and other legislation it administers.

A General Anti-Avoidance Rule (GAAR) is included in the Income Tax Act, 1962, as Part IIA of Chapter III of the Act. The GAAR permits SARS to counter impermissible tax avoidance arrangements that would not be addressed by the other provisions of the Act. While impermissible tax avoidance arrangements may involve IFFs, they may also be restricted to purely domestic arrangements or involve cross-border flows that would otherwise be considered legitimate. Another GAAR is provided for in section 73 of the Value-Added Tax Act, 1991, which deals with schemes for obtaining undue tax benefits in that context. SARS may also make use of common law doctrines, such as “substance over form”, in challenging abusive arrangements.

In addition, a reportable arrangements system is included in the Tax Administration Act, 2011, as Part B of Chapter 4 of the Act. The reportable arrangements system provides for the reporting of arrangements that present a heightened risk of undue tax benefits by their participants or promotors to SARS.

Supplementing the GAAR, South Africa also has tax legislation dealing with more specific avoidance concerns. These include interest limitation rules (recently amended), thin capitalisation rules, controlled foreign company (CFC) rules, as well as transfer pricing rules.

Where SARS identifies IFFs with a tax or customs impact, either through its own efforts or in cooperation with other government entities, SARS applies the legislation and legal tools at its disposal to address the IFFs.

Addressing IFFs remains a consistent and key focus for SARS, the South African Reserve Bank, the Financial Sector Conduct Authority, the Financial Intelligence Centre, the National Prosecuting Authority, the Special Investigating Unit, the Hawks, South African Police Service, and the National Treasury. In this regard, South Africa is actively involved in international efforts aimed at mitigating the problem. Key steps taken in recent times include:

• Becoming a member of the Global Forum of transparency and exchange of information for tax purposes in 2009
• Signing the Multilateral Convention in 2011
• Introducing a Voluntary Disclosure Programme (VDP) in 2012
• Signature of the FATCA Intergovernmental Agreement in 2014
• Introduction of the temporary Special VDP in 2016
• First tax information exchange under the Common Reporting Standard (CRS) in 2017
• Agreeing to the proposal for a minimum global tax rate (Pillar 2) to minimise global financial flows to tax havens (2021)

Reply:

(a) National Treasury initiated the process of stopping and re-allocation at the end of the second quarter of the 2022/23 municipal financial year, 31 December 2022 and conducted an analysis of the conditional grants performance.

The reasons that informed National Treasury to stop R2.7 billion transfers of conditional grants are:

• Anticipation that a municipality shall substantially underspend the allocation or any programme; and
• Serious or persistence material breach of the Division of Revenue Act.

This decision was considered to safeguard the allocations against possible misuse of the funds and prevent funds from being utilised for operational activities.

1. (b) (i) The grants that were affected are:

Capital grants:

• Water Services Infrastructure Grant 5B;
• Regional Bulk Infrastructure Grant 5B;
• Public Transport Networks Grant (PTNG);
• Urban Settlements Development Gran
• Informal Settlements Upgrading Partnership Grant;
• Neighbourhood Development Partnership Grant 5B
• Integrated National Electrification Programme 5B;
• Municipal Infrastructure Grant; and
• Integrated Urban Development Grant.

Capacity Grants:

• Rural Roads Asset Management System; and
• Energy Efficiency and Demand-Side Management Grant.

1. (b) (i) The effect of the stopped funds are:

• The affected municipalities would not be able to implement their full budgeted plan against their programmes;
• Municipalities have to reprioritise the remaining funds against committed and shovel ready projects;
• National Treasury has an opportunity to reallocate the stopped funds (The entire R2.7 billion was reallocated to fast spending programmes between best performing municipalities) to other fast-moving projects in other municipalities; and
• Persistent non-compliance to the Act and anticipated underspending implies that transferred funds may lead to fiscal dumping and possible conditional grants misuse

2. National Treasury used the second quarter reports (Section 71 of MFMA) for the period ending 31 December 2022 and the monthly DoRA reports (Section 10 of 2022 DoRA) received from the transferring officers as a benchmark to decide on municipalities that are underperforming against their allocations.

A benchmark between 40 and 45 per cent against the total allocation was used in determining the list of the proposed municipalities which were considered for stopping after six months into the financial year.

3. The stopping process in terms of Section 18 of DoRA is purely performance based. This section stipulates that National Treasury may in its discretion or at the request of a transferring officer stop the transfer of schedules 4, 5 or 6 allocation if it is anticipated that a municipality shall substantially underspend on the conditional grants that are partially or fully funded by the allocation in the respective financial year.

National Treasury invokes the stopping and reallocation section in the DoRA on an annual basis as part of the monitoring work on the performance of municipalities. When this opportunity arises, municipalities that have improved on their performance and have lost their fund previously are given preference on the reallocation of the allocation in terms of section 19 of DoRA.

4. The National Treasury used the second quarter reports (Section 71 of MFMA) for the period ending 31 December 2022 (mid-year) and the monthly DoRA reports (Section 10 of 2022 DoRA) as submitted by Transferring Officers (national departments administering conditional grants). These reports were used to determine, which municipalities were underspending against their conditional grants and earmarked for stopping of a portion of their conditional grants, i.e., municipalities that had expenditure of less than 40 per cent (for municipalities with allocations of less than R100 million) and 45 per cent (for municipalities with allocations of more than R100 million) of their allocations as at mid-year of the 2022/23 municipal financial year.

Reply:

(a) Gross debt of the national government is disclosed in Table 7.7 of the 2023 Budget Review. It is estimated to reach R5.06 trillion or 72.2 per cent of GDP by the end of the 2023/24 Financial Year.

(b) (i) Government guarantee exposure to state-owned companies is disclosed on Table 7.10 on page 91 of the 2023 Budget Review, and these are explicitly underwritten. Other contingent liabilities are included with the provisions in Table 7.11 on page 92 of the 2023 Budget Review.

(ii) There is no debt (borrowing) or loans taken up by municipalities that have been underwritten by the national fiscus.  Chapter 6 of the MFMA sets the legal framework that enables municipalities to take their own decisions regarding borrowing. Specifically, sections 50 and 51 of the MFMA deal with municipal guarantees and national and provincial guarantees.

This decision-making process for Municipal Councils were empowered by the Amendment to the Constitution of the Republic, in section 230A.  Therefore, Municipalities borrow on the strength of their own financial standing and status.

Reply:

(1) Section 8(1) of the Municipal Fiscal Powers and Functions Act (MFPFA) stipulates that the Minister of Finance may prescribe compulsory norms and standards for imposing municipal surcharges. To date, the Minister of Finance have not prescribed any compulsory norms and standards for regulating the imposition of municipal surcharges. However, the absence of the norms and standards does not restrict a municipality from imposing surcharges in their tariffs given that this is a power given to municipalities in terms of section 229 of the Constitution and the Municipal Systems Act (MSA). Furthermore, if a municipality decides to levy a surcharge, approval is done by the municipal council in terms of a tariff policy, pursuant to section 75 of the MSA and will also be subject to section 8 of the Municipal Fiscal Powers and Functions Act (MFPFA), as soon as norms and standards for municipal surcharges are prescribed by the Minister of Finance. The National Treasury is currently reviewing the possibility of introducing compulsory norms and standards in terms of section 8 of the MFPFA and has appointed a service provider to assist with the development of compulsory national norms and standards for regulating municipal surcharges on electricity.

1. Not applicable.
2. Not applicable.

(2) It is not yet necessary for the City of Cape Town (or any other municipality) to comply with section 9(1) of the MFPFA given that the norms and standards referred to in section 8 of the Act is yet to be prescribed by the Minister of Finance. As soon as these norms and standards are prescribed, all municipalities levying surcharges on municipal services will however be required to comply with this provision.

(3) See response in (2).

1. Not applicable.
2. Not applicable.

4. See response in (1).

(5)(a) Various pieces of legislation regulate the levying of municipal surcharges:

The Constitution

Section 229 of the Constitution indicates that a municipality may impose—

(1) subject to subsections (2), (3) and (4), a municipality may impose

(a) rates on property and surcharges on fees for services provided by or on behalf of the municipality

(2) The power of a municipality to impose rates on property, surcharges on fees for services provided by or on behalf of the municipality, or other taxes, levies or duties—

(b) may be regulated by national legislation.

The Municipal Fiscal Powers and Functions Act (MFPFA)

Section 8 of the MFPFA gives power to the Minister of Finance to prescribe compulsory national norms and standards for imposing “municipal surcharges”. Furthermore, when levying surcharges, municipalities are required in terms of section 9(1)(a) of the MFPFA to comply with any norms and standards contemplated in section 8 of the MFPFA.

The Municipal Systems Act (MSA)

Section 4(1)(c)(ii) of the MSA indicates that the council of a municipality has the right to finance the affairs of the municipality by imposing surcharges on fees, rates on property and, to the extent authorised by national legislation, other taxes, levies and duties. In section 74(2)(f), the Act provides that a municipal tariff policy must reflect at least the following principles: “(f) provision may be made in appropriate circumstances for a surcharge on the tariff for a service”. In terms of section 94(1), the Minister responsible for Local Government may regulate the following matters: “(d) criteria to be taken into account by municipalities when imposing surcharges on tariffs for services and determining the duration thereof;”.

(b) Once norms and standards for municipal surcharges are prescribed for a specific municipal service as per section 8 of the MFPFA, any municipality that does not adhere to such norms and standards (e.g. exceeds prescribed levels) will be in non-compliance with the Act, except if the Minister of Finance has given approval to such municipality in terms of section 9(1)(b) to be exempted from complying to any of the norms and standards as contemplated in section 8 of the Act.

Reply:

Considerations for continued financing and expanding of public employment programmes such as the Expanded Public Works Programme and the Presidential Employment Stimulus programme are part of such the budget process, and the outcome of this process will be announced in the 2023 Medium Term Budget Policy Statement.  

Reply:

The Municipal Regulations on a Standard Chart of Accounts (mSCOA), Gazette No. 37577, 2014, was promulgated on 22 April 2014. All municipalities and municipal entities had to comply with the mSCOA Regulations by 01 July 2017. In terms of mSCOA, municipalities should budget, transact and report on all six (6) legislated mSCOA segments and submit the required data strings as per the legislated timeframes to the National Treasury’s Local Government Database and Reporting System (LGDRS). The budget and adjustments budgets adopted by Council must be locked on the core municipal financial system before submitting the data strings to the LGDRS. Most of the municipal financial systems have built-in controls that do not allow transacting if the budget or adjustments budget has not been locked. Also, Section 65(2)(j) of the MFMA requires that the accounting officer must take all reasonable steps to ensure that all financial accounts of the municipality are closed at month-end and reconciled with its records before submitting the monthly data string to the LGDRS.

As communicated in MFMA Budget Circular No. 123 dated 03 March 2023, the LGDRS is locked on the 10th working day of the month following the legislated deadline. The late submissions of data strings are not accepted by the LGDRS. The timeous submission of credible mSCOA data strings to the LGDRS has been included in the equitable share release criteria for 2023/24 that was communicated in MFMA Circular No. 122 (dated 09 December 2022).

Since the financial system must be locked at the end of the month to generate mSCOA data strings, municipalities may not open during closed periods to correct errors. Errors must be corrected in the next open period. Providers of municipal financial systems have also been instructed by the National Treasury in 2019 to ensure that the necessary internal controls are built into the financial system to prevent the opening during closed periods on the financial system and the bypassing of such controls.

Reply:

Government is working to manage public finances in a prudent and sustainable manner. This includes appropriately responding to the materialization of risks, include unforeseen economic and financial conditions. To be clear, the Government has not run out of money. Government publishes the "Statement of the National Government’s Revenue, Expenditure, and Borrowing" monthly, available on the National Treasury website. This statement provides detailed information into government revenue collections, expenditure and borrowing.

Revenue collections for the first four months of 2023/24 have performed below expectations, primarily due to under-collections in corporate income tax and higher VAT refunds. Therefore, the main budget deficit for the first four months of 2023/24 is higher than expected.

Compared to the 2023 Budget, the economic and revenue outlook has deteriorated, and tighter financial conditions have constrained government’s borrowing programme and led to higher borrowing costs. Government remains committed to prudent fiscal management and addressing these challenges to ensure the financial stability of the nation.

Reply:

1. The position of the Minster has not changed since the last oral reply. As indicated then, zero-rating of specific foodstuffs provides a larger proportional benefit to the poor (i.e. progressivity is enhanced). Overall, goods have a progressive impact and a strong equity-gain ratio – poor people consume a relatively high share of zero-rated items. Nevertheless, the analysis of the independent panel in 2018 indicated that extending zero-rating to further food items would be inefficient, since high-income households tend to benefit more from such measures.
2. We acknowledge the importance of the agricultural sector in tackling the issue of food insecurity which can both be addressed by increasing availability of food and affordability of food. National Treasury provides fiscal support to departments to support the agricultural sector. The fiscal support for agricultural sector is determined through the budget allocations to the Department of Agriculture, Land Reform and Rural Development, as articulated in the Estimate of National Expenditure (ENE) -Vote 29 and to provinces though the Division Revenue Act, and this information is available in various provincial budgets.
3. Consolidated spending allocations for agriculture and rural development, as presented in the 2023 Budget, are R27.8 billion in 2023/24, R28.6 billion in 2024/25 and R29.9 billion in 2025/26.

Reply:

The Municipal Finance Management Act, 2003 (Act No 56 of 2003) and through various sections of the Act, provide guidelines to municipalities on how to treat impending revenue shortfalls. In addition, the National Treasury also provides regular Budget Circulars to guide municipalities to prepare annual budgets and address situations like loadshedding.

Section 70 of the MFMA, subsection 1. “the accounting officer of a municipality must report in writing to the municipal council – (a) any impending (i) shortfalls in budgeted revenue, and (ii) overspending of the municipality’s budget, and (b) any steps taken to prevent or rectify such shortfalls or overspending.

Section 28 of the same Act provides guidance on Municipal Adjustments Budgets – (1)(a) that “a municipality may revise an approved budget through an Adjustments Budget and (2)(a) must adjust the revenue and expenditure estimates downwards if there is a material under collection of revenue during the current year.

Given the fiscal constrained environment within which the National Fiscus operates, the National Treasury was not in a position during the preparation of the 2022 MTEF, to make any additional funding available to municipalities for this purpose. As a result, they were advised to reprioritize their tabled 2023 MTREF Budgets to absorb the cost associated with loadshedding within baselines.

Reply:

National Treasury has been part of the process to develop the policy paper on Comprehensive Social Security and Retirement Reform from its inception in 2007 and throughout the NEDLAC process, where it was tabled for discussion in 2016. The issues are complex, including the fiscal implications, and National Treasury continues to engage with the Department of Social Development. Such process is not merely one of submitting comments, as the fiscal framework is the responsibility of the National Treasury. The policy framework involves fiscal, economic and expenditure trade-offs, and requires the concurrence of all three departments. Ultimately, the policy paper will reflect the Government’s position, and not that of any one department, and will be made public as soon as governmental processes have been completed and approved by Cabinet.

Reply:

1. National Treasury collects outstanding creditor’s information via the Local Government Database and Reporting System (LGDRS) hosted by National Treasury on monthly basis. However, although the list of outstanding creditors includes pension fund contributions, it does not provide a breakdown for outstanding medical aid contributions but this category is lumped under other payables. The National Treasury is putting measures to facilitate the collection of such information for further purposes. Another challenge is that some municipalities might choose not to disclose this information in their submissions to the National Treasury’s database which makes it challenging to get an accurate picture of municipalities owing the Pension Funds.

At this stage, the only four (4) municipalities in the Free State and five (5) in the Northern Cape have disclosed the information on arrears of monthly statutory contributions to the Pension Fund. However, municipalities in Limpopo and Mpumalanga disclosed no arrears since they are up to date with their respective monthly contributions to the Pension and Medical Aid Funds. The information is listed in Annexure A.

(2)(a)(c) The National Treasury has communicated the criteria for the release of the Equitable Share in its annual Budget Circulars. Included in the criteria is the requirement to table a funded budget in terms of Section 18 of the MFMA as well as making adequate provision to repay all creditors in terms of Section 65(2)(f) of the MFMA.

Every time we received correspondence from the respective pension funds administrator on outstanding payments / accounts, the National Treasury will send a letter to the respective municipality requesting reasons as to why they have defaulted.

(2)(b) The total amount reported for pension fund contributions are consolidated Retirement Fund R23.7 million and Municipal Workers Retirement Fund R6.3 million. More details attached as Annexure A.

(2)(d) At this stage, none of the above listed municipalities compensated any municipal officials or councillors affected by the no-payment of monthly contributions to the Pension Funds and/ or Medical Aid Funds. The responsibility to ensure this is avoided at all costs is with the respective Municipal Councils.

However, at Renosterberg Municipality, the municipal employees instituted a lawsuit against the municipality by an affected municipal official but there was no follow through, and the lawsuit was dropped.

(3) As indicated before, at Renosterberg Municipality, criminal charges were laid against the former administrative and political leadership (Municipal Manager, the Chief Financial Officer and the Mayor). At this stage, no arrest has been made and the criminal case is still under investigation by the law enforcement agencies as of May / June. The municipality had not received further communication from the law enforcement officers other than the charge sheet.

As for the remainder of the above listed municipalities, no criminal cases were reported to the police and reason cited by the Provincial Treasury was the instability at senior management in the respective municipalities that hampered the implementation of consequence management.

Annexure A

Kai Garib Local Municipality:

(2)(a) For how long has each specified municipality not been paying the arrears?

The municipality reported to have defaulted on third party payments since February 2022.

(2)(b) The total amount reported for pension fund contributions.

Renosterberg Local Municipality:

2 (a) For how long has each specified municipality not been paying the arrears?

The municipality reported to have defaulted on third party payments since May 2017.

2 (b) What is the total amount of the specified arrears?

The total amount reported for pension fund contributions and medical aid amounts to R19 million.

Ubuntu Local Municipality:

2 (a) For how long has each specified municipality not been paying the arrears?

The municipality reported to have defaulted on third party payments since March 2023.

2 (b) What is the total amount of the specified arrears?

The total amount reported for third parties amounts to R3.4 million.

Thembelihle Local Municipality:

2 (a) For how long has each specified municipality not been paying the arrears?

Defaulted from December 2021.

2 (b) What is the total amount of the specified arrears?

The total amount reported for pension fund contributions (cape joint retirement fund and amounting to R5.1 million.

Kheis Local Municipality:

2 (a) For how long has each specified municipality not been paying the arrears?

The municipality reported to have defaulted on third party payments since July 2021.

2 (b) What is the total amount of the specified arrears?

The total amount reported for pension fund contributions and medical aid amounts to R19.9 million.

Magareng Local Municipality:

2 (a) For how long has each specified municipality not been paying the arrears?

The municipality reported to have defaulted on third party payments since March 2021.

2 (b) What is the total amount of the specified arrears?

The total amount reported for third parties amounts to R4.3 million.

Reply:

The National Treasury does not take steps to encourage any specific person to live and work in South Africa and focuses instead on creating a climate for encouraging both domestic and foreign investors to invest in South Africa. This approach does entail supporting the removal of obstacles to investment, like the red tape that prevents skilled personnel from foreign countries from working in South Africa. The recently completed work visa review that proposed amendments to streamline and improve immigration regulations is a good example of such an initiative. In addition, it is also important for us to continue to improve the domestic climate to keep skilled or high-net worth individuals to continue to live and work in South Africa.

Reply:

(aa) Procurement by National Treasury is largely for equipment, consultants or advisory services and it is not possible to accurately allocate amounts in the categories requested, as such classifications are not recorded on the BAS system. Our best estimate is that R98 460 381.90 has been allocated to SMME in the 2021/22 Financial Year.

(bb) For 2023/24, the information will be made available in 2024 after the end of the financial year.

Reply:

1. NATIONAL TREASURY

1. No

(a)(i)(ii) N/A

2. ASB

We do not have contracts with G4S.

3. CBDA

1. CBDA does not have any contract with G4S. The CBDA is currently housed in National Treasury building with dependence on their security.
2. Not applicable
3. Not applicable

 

4. DBSA

The Development Bank of Southern Africa (DBSA) has no security contract with the security firm G4S. The DBSA security officers are Bank employees.

5. FAIS OMBUD

We confirm that the Office of the FAIS Ombud does not have any contracts with G4S

6. FIC

(b) The Financial Intelligence Centre (FIC) does not currently have any contract in place with the security company G4S.

1. Not applicable
2. Not applicable

7. FSCA

The FSCA does not have any contract with G4S. The security company responsible for the FSCA premises is Tatanium Guarding Services.

8. GEPF

The Government Employees Pension Fund (GEPF) does not have a security contract with the company G4S.

9. GPAA

The Government Pensions Administration Agency (GPAA) can confirm that it has no contracts with G4S.

10. GTAC

GTAC does not have any contracts with the security company G4S.

11. IRBA

The Independent Regulatory Board for Auditors does not have a contract with G4S and has no position in this regard.

12. LANDBANK

Land Bank does not have any contract with G4S.

13. OPFA

The Office of the Pension Funds Adjudicator does not have any current contracts with the security company G4S. Its offices are leased from a service provider/landlord who is responsible for building security.

14. PIC

The PIC has no contracts with G4S.

15. SARS

(b) SARS follows a competitive procurement process and awarded security related services to various service providers. G4S did not win any award from SARS and currently is NOT a service provider to the institution.

16. SASRIA

Sasria SOC Limited does not have any current contracts with the security company G4S.

17. OFFICE OF THE TAX OMBUD (OTO)

Whether (a) the National Treasury and/or

• any of the entities reporting to him have any current contracts with the security company G4S;

The OTO does not have current contract with G4S.

• if not, what is the position in this regard;

The OTO relies on and follows the SARS procurement policies and procedures including awarding of contracts.

Reply:

1. Government has provided the reasons for South Africa being greylisted through public statements by National Treasury at the time (e.g. statement issued by National Treasury dated 24 February 2023[1], and related frequency asked questions), and responses to the many parliamentary questions, for eg Nos PQ943, PQ3967, PQ2641, PQ2642, and also a question for oral response for the Deputy President (CO254E).

The Financial Action Task Force (FATF) greylisted South Africa despite acknowledging the “significant and positive progress” made by the country in addressing many of the deficiencies identified in the 2021 Mutual Evaluation Report on South Africa. This included the enactment of two major pieces of legislation, namely the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 (“General Laws Amendment Act”) and the Protection of Constitutional Democracy Against Terrorism and Related Activities Amendment Act, 2022 (“POCDATARA Amendment Act”). The two pieces of legislation amended six Acts of Parliament, to deal with technical deficiencies in the legislative framework of the country’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system. FATF concluded that the country needed to make further effectiveness (in implementation) improvements, through sustained progress in addressing eight (8) areas of strategic deficiencies related to the effective implementation of South Africa’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) laws.

2. Dealing or not dealing with illicit financial flows is not the reason for South Africa been greylisted, but is based on the extent of compliance by a country with the 40 FATF Recommendations and 11 effectiveness outcome measures, as assessed through a Mutual Evaluation conducted or overseen by FATF or associated regional bodies. It is important to note that the fight against money laundering and terror financing is generally broader than the fight against IFFs.

Also, contrary to the assumptioin made by the Honourable Member, Government has not ignored the call by opposition parties to deal with illicit financial flows and taken a number of measures to counter it. Government established an Illicit Financial Flows Working Group, which reports to the Interdepartmental Committee on AML/CFT that is chaired by the Director-General of National Treasury, to analyse illicit financial flows into and out of the country. There is also a working group that comprises of the SARS, NICOC, National Treasury and the DTIC that is currently working on formulating a National Anti-Illicit Economy strategy. This process will include an analysis of the underlying causes for IFFs and make recommendations that will enable IFFs to be traced, tracked and the perpetrators to be arrested.

3. (a) South Africa has committed to an Action Plan to address all remaining deficiencies identified in its anti-money laundering and combating the financing of terrorism. Implementing the Action Plan will assist South Africa to be removed from the FATF greylist, and further, to prevent South Africa from been greylisted in the fugure when the next mutual evaluation is conducted in the next seven to ten years. The General Laws (Anti-Money Laundering and the Combating of the Financing of Terrorism) Amendment Act, together with the POCDATARA Amendment Act (see above) are expected to improve the effectiveness of the country’s AML/CFT system. It is however important to note that as FATF standards or recommendations change, the South African AML/CFT system will also need to be continuously improved to address the evolving money laundering and terror financing risks.

(b) Refer to (2) above.

4. The FATF set, in consultation with South African authorities, a timeframe of January 2025 to address all outstanding deficiencies, for South African to be removed from the greylist. It is our hope that we will be removed sooner, sometime in 2024.

The Interdepartmental Committee on AML/CFT that is chaired by the Director-General of National Treasury monitors progress towards addressing all outstanding deficiencies fully and within the timelines agreed between South African authorities and the FATF. The Interdepartmental Committee on AML/CFT is required to report to Cabinet on a quarterly basis.

5. The Honourable member would be aware that National Treasury does not have the mandate and competence to offer protection to whistle blowers and relies on the law enforcement authorities to do so. National Treasury recognises the need to improve and strengthen our whistleblower system, as it is an essential tool to fight fraud and corruption in the public sector.

1. https://www.treasury.gov.za/comm_media/press/2023/2023022401%20Media%20statement%20-%20Response%20to%20FATF.pdf ↑

Reply:

The calculations referred to relate to the potential financial and macroeconomic impact of the market response following the comments by US Ambassador R E Brigety on 11 May 2023. The National Treasury conducted a preliminary analysis of the possible macro-fiscal impact of South Africa’s geopolitical tensions related to SA-US relations, focusing primarily on the impact on the current fiscal framework. The analysis considered that there was a significant depreciation in the rand against the US dollar in May 2023, in part due to the pronouncements of the US Ambassador to South Africa regarding the Lady R vessel. The analysis considered the possible negative consequences of this on key macroeconomic variables including higher inflation rates, borrowing costs and, subsequently, bond yields – all of which weaken the fiscal position. A protracted materialization of the events assessed in this analysis will require the Minister and the National Treasury to consider possible measures in mitigation. An analysis of a potential loss of benefits under AGOA and/or the risk of secondary sanctions is being considered; however, given this work’s nature and required detail, this is expected to take some time.

Reply:

Government has taken a number of steps since the era of state capture to strengthen the anti-corruption system, but even with such improvements, no system can be watertight against corruption. It is a fact that corruption has become deeply entrenched in all three spheres of government, at national, provincial and local government level and in public entities. We need to do more as a country to improve governance and oversight systems, but most importantly, to ensure that all accounting officers ensure that they always act in the public interest and spend funds for the purposes budgeted for. More broadly, that all in the public service in all three spheres of government, be it political office-bearers, legislators, councilors, accounting officers and authorities, and all officials and employees in the public sector, act honestly and with integrity at all times.

The President submitted to Parliament the Government’s response to the recommendations of the Zondo Commission, or more formally, the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector, on 22 October 2022. Many of these proposals are in the process of being implemented, and it is my view that both Parliament and Cabinet need to be more involved in overseeing its implementation. Government has also recognized that corruption is one of the highest risks facing any procurement process, and that we need to strengthen our planning, preventive and internal control systems, to reduce the scope of such corruption. In this respect, we are modernizing our procurement system, and also introduced a new Public Procurement Bill to give effect to the procurement-related recommendations of the Commission.

The Office of the Chief Procurement Office is also working closely with numerous stakeholders and partners such as the World Bank and OECD to learn the best lessons internationally and commencing with a review in collaboration with the OECD on the Methodology for Assessing Procurement Systems (MAPS) to guide the modernisation process, by identifying areas of deficiencies and vulnerabilities in the current system. The National Treasury also maintains the Central Supplier Database for the government and has made improvements to improve compliance with regulations for state employees and restricted suppliers not to do business with the state. A transparency initiative was launched through the eTender portal where procurement opportunities and procurement data are shared with members of the public. The initial phase of Open Contract Data Standards has been implemented enabling civil society to have access to procurement data in an international standard making it easier for interpretation. Transparency improves accountability and the National Treasury is continuing to implement transparency initiatives for reducing corruption and improving oversight on procurement activities.

Accounting officers and authorities are at the heart of our spending and reporting system. Section 38(1)(a)(i) of the PFMA (and similarly section xxx of the MFMA) requires accounting officers and authorities to develop and maintain an effective, efficient, and transparent system of financial, risk management and internal control. Whilst it is the responsibility of accounting officers and authorities to ensure that funds appropriated or under their control are not misused, the National Treasury monitors the spending patterns of national departments monthly and reports to Parliament on a quarterly basis to assist Parliament and oversight committees of government with their oversight role. There are similar reporting responsibilities on provincial treasuries and for municipalities.

Aside from the executive in each government in any sphere improving its oversight system over their accounting officers and authorities, it is also important for Parliament and all other legislatures to better use the reporting system to strengthen the system of oversight and accountability, especially given that they are the last line of accountability for our oversight and monitoring system. It is also important that all accounting officers and authorities (and elected office-bearers) be accountable, and have effective risk management and internal control systems, as well as their audit committees, to assist them to identify corrupt or suspicious transactions. It is also critical that post-financial year mechanisms like the audit process focus on potential fraud and suspicious transactions, particularly in the procurement system, and differentiate between corruption and minor compliance transgressions that do not involve financial losses.

Below are some specific recent initiatives undertaken by the National Treasury in addressing corruption, misuse of funds, building capacity and ensuring that proper governance systems are developed and implemented by departments.

Capacity building initiatives

• Chief Financial Officers accelerated programme – In recognising the capacity challenges in departments, the National Treasury developed a competency framework for financial management to build capacity of officials in technical and behavioural competencies. An accelerated programmes for Chief Financial Officers (CFOs) was developed and piloted with the objective of enhancing the skills of CFOs and to equip new entrants from the private sector with public sector competencies. A Supply Chain Management Executive programme was also developed with the aim of providing an understanding of the key roles and responsibilities of all heads of procurement and CEOs. To improve governance, two capacity-building short learning programmes aimed at improving public sector internal auditors’ competencies in the ‘Development of Risk-Based Audit Plans’ and their ability to conduct Audit of Information Technology General Controls was developed and piloted.

• Chartered Accountants Academy – The National Treasury continued to support the development of accounting professionals through the Chartered Accountants Academy (CAA). To date, the Academy has produced seventy-six (76) chartered accountants and National Treasury in partnership with the National School of Government is embarking on the journey to professionalize the public sector.

 

• Public Sector Audit Committee Forum – National Treasury has continuously maintained its partnership with the Public Sector Audit Committee Forum (PSACF) which has developed several position papers and hosted virtual round table discussions to assist Audit Committee members to fulfil their roles effectively, efficiently, and independently.

• Internal audit support – The National Treasury remains committed to advancing good governance through stakeholder engagements, provision of technical advice and implementation of legislative prescripts. The information sharing platform with chief audit executives and academia was convened to reflect on improving accountability and transparency in the South African public sector through continuous assurance. The standing MoU between the National Treasury and the Institute of Internal Auditors (South Africa) has made it possible for the National Treasury to participate in the latest review of the Global Internal Auditing Standards (public sector input) impacting the role and responsibilities of internal auditors and audit committees.

Specialised Audit Services

The National Treasury conducts specialised performance audits and forensic investigations to enforce financial management prescripts, ensure accountability, effective, efficient, and economical use of resources. The National Treasury assists the law enforcement agencies to investigate allegations of fraud and corruption and institute charges and assist with recovering proceeds of crime.

Reply:

The office of the Chief Procurement Officer within the National Treasury has provided the following information:

1. (a) The total number of tenders that Eskom awarded using deviations was 49. Details are attached as Annexure A. Please note that the list ends on 31 March 2022 as from 1 April 2022, organs of the state were not required to seek approval from the National Treasury.

(b) Details of tenders [(i) approved and (ii) not approved)] are attached as Annexure A.

1. (a) Details of each tender’s monetary value (R76 266 103 275,27) are attached in Annexure A.

(b) Details of each service on awarded tenders are attached in Annexure A.

(c) Details of each entity awarded tender/s are attached in Annexure A.

Reply:

1. The Honourable Member is asking a very vague question. All departments and public entities must act in terms of the law, and the law may have both economic and non-economic objectives, like social or developmental objectives, as well as constitutional objectives. So, for example, spending on school education or health is necessary, and cannot be regarded as “mis-aligned” because it is not directly related to an economic policy programme.  The Honourable Member is therefore requested to be more precise when asking such a question.

2. Not applicable, refer to (a) on the need for the question to be more precise.

Reply:

It is not possible to answer this question accurately as the payment system does not contain such classifications for size of business. What we can provide is our own estimate, which is that the total percentage of spending by the National Treasury on small-medium and micro enterprises is estimated to be 20% versus big businesses at 80% for all transactions in the 2021-22 financial year.

Reply:

1) The Public Audit Act, 2004 (Act No. 25 of 2004) as amended in section 5(1B)(b) states that the Auditor-General has the power to issue a certificate of debt, as prescribed, where an accounting officer or accounting authority has failed to comply with remedial action. The Regulations published on 1 April 2019 state in section 12 that for purposes of this Part, “accounting officer” also includes a former accounting officer, and “member of the accounting authority” also includes a former member of the accounting authority. Public officials that have left the institutions therefore can still be issued with certificates of debt.

2) and (3) The National Treasury does not maintain this information. The Auditor General of South Africa should be engaged to obtain the detailed information.

Reply:

Taxable (fringe) benefits are calculated under the Seventh Schedule to the Income Tax Act. The legislation makes provision for which benefits are taxable, how the value of the taxable benefit must be calculated, and circumstances when no value is placed on a particular benefit.

The tax consequences below are based on the benefits as granted under the Guide for Members of the Executive (Ministerial Handbook). SARS accepts that Ministers and Deputy Ministers (Members) generally utilise these benefits as prescribed in the Ministerial Handbook.

Accommodation (Paragraph 9 of the Seventh Schedule)

Ministers and Deputy Ministers (Members) are entitled to State-provided residential accommodation. They may be provided with either one or two residences (one per seat of office).

• If a member normally resides in his or her own residence, then any residence provided by the state will not attract a taxable value (no value).
• If one residence is provided by the State, and the Member relocates and resides at that residence, the Member is liable to fringe benefits tax on the rental value. The rental value is calculated in terms of a formula linked to the Member’s remuneration.
• Where two State-owned residences are provided, the Member must be taxed on the property with the highest rental value.
• Any rental payable by a Minister for a second residence, may be deducted from the taxable rental value calculated under the formula.

Electricity and Water (Paragraph 9 of the Seventh Schedule)

The Ministerial Handbook provides that Members are liable for all costs related to a private residence. However, should the State pay a member’s private residence utilities bill, a taxable benefit would arise.

Electricity, water, and other property-related utilities supplied to a member occupying a State-owned residence is included in the rental value of the taxable benefit arising from the use of the accommodation, as referenced above.

Security (paragraph 2(a) and 2(e) of the Seventh Schedule)

The State does not provide security upgrades to Members’ private homes, so no tax consequences arise.

Any security upgrades effected at State-owned residences, accrue to the State, not the Member occupying the premises, and so no taxable benefit arises.

Static security is provided to Members both at private residences designated as “official” and at State-owned residences.

• Static security at a private residence is a taxable benefit, the value is the cost to the State.
• Static security at a State-owned residence does not result in a taxable value arising.

Close security provided to a member whilst in the course of performing duties of office will not be taxable. Use of close security when the Member is off duty will be a taxable benefit, the value being the cost to the State of the private cost.

Motor vehicles (Paragraph 7 of the Seventh Schedule)

State-owned motor vehicles are made available to Members to utilise for official purposes. The nature of a member’s duties is such that he or she will perform their duties outside of normal work hours. Private use is infrequent or incidental to business use, and so a no-value rule applies to Members, meaning that no taxable amount arises.

Staff (Paragraph 2(e) of the Seventh Schedule)

Personal staff are provided to Members to assist them with their official duties. No taxable benefit arises due to staff employed to assist with official duties at an official residence.

Flights

Official flights are not subject to fringe benefits tax. Private flights are taxable unless a no-value rule applies. The no-value rule applies if the flight is for the Member’s spouse or minor child, the Member is stationed more than 250kms from his or her home, is away from home for more than 183 days in a year, and the travel is for between home and the place where the Member is stationed.

Allowances (section 8(1) of the Act)

Most allowances paid to Members are fully taxable. Certain exceptions, such as travel allowances and subsistence allowances, are treated preferentially for all taxpayers, including Members, who may all claim deductions for business expenses.

Members also by law receive a public office allowance. 50% of this allowance is taxed monthly via PAYE withholding. The full allowance is taxable on assessment when the annual tax return is submitted, unless the Member can prove that certain qualifying expenses were incurred and paid (and not recovered from the respective Departments), which may reduce the tax liability on assessment.

Reply:

The Minister of Finance is not directly responsible for managing any major infrastructure budgets, as such budgets reside within the appropriate national and provincial departmental budgets, municipal budgets or that of a public entity or state-owned entities. Each organ of state is responsible for maintaining appropriate and effective infrastructure budgets. From a national budget perspective, it is recognised that the issue of ageing infrastructure in South Africa has been a longstanding challenge, including for both rural and urban municipalities. There have been some proactive measures taken to address this issue. Here are some examples from the local government sphere:

• Since the 2013/14 financial year, the local government equitable share (LGES) includes a maintenance estimate of 10 per cent. This amounted to R5.6 billion in maintenance funding for municipalities to recover the cost of providing free basic services to indigent households in 2021/22, and it will be R7.1 billion in 2023/24. These funds are unconditional transfers, meaning that they are discretionary in nature. So, the municipality has the choice of whether to use them for maintenance or any other priority or budget commitment.

• Several reforms have been implemented following the review of infrastructure conditional grants in 2014. The Municipal Infrastructure Grant (MIG) includes provisions for infrastructure renewal and upgrades, a provision for road maintenance projects, as well as the ability for municipalities to develop Infrastructure Asset Management Plans using 5 per cent of their allocations. Small and rural municipalities are the main beneficiaries of this grant.

• The government has provided training and capacity building programs for municipal officials and staff to improve their skills and knowledge in infrastructure planning, management, and maintenance. Since 2012, we have been pioneering the development of critical infrastructure delivery skills in municipalities through the implementation of the Infrastructure Skills Development Grant (ISDG). Since its inception, more than three hundred people have been professionalised and/ or certified within the built environment. These professionals then exercise their expertise to manage, operate and maintain public sector or municipal infrastructure.

These proactive measures are aimed at improving the quality of infrastructure in rural municipalities, which is critical for the provision of basic services, promoting economic growth, and improving the quality of life for rural communities.

Reply:

Parliament approved the fiscal framework for 2023/24 on 8 March 2023. The provisional liquidation of SAPO and business rescue processes were initiated via a judicial process subsequent to the 2023 Budget and funding to support this process was not included in the approved fiscal framework. Government is responding through the judicial process, but various options are possible including reprioritisation of funds, within the approved fiscal framework. However, the Appropriation Bill has not been enacted yet and any adjustments in terms of section 6 would need to be considered for the adjustments budget later this year in October.

Reply:

1. Yes, National Treasury officials within the International Development Cooperation unit of the Budget Office met with Mr Frazer Mbili on Thursday, 27 October 2022 at 14H00 to 15H00 (Ms Teams meeting).

2. Following the meeting of the 27th of October 2022, and as agreed, Mr Mbili was to send various documentation as verification of sources of co-financing (from co-financiers, UK Investment Group, the Humanitarian Forgive Loan Programme) of SOSO engagement with Government (Service Level Agreements) as well as the financing model proposed. The documentation sent by Mr Mbili of 7 November 2022 did not include any verification documentation. The National Treasury could therefore not verify the information received from Mr Mbili and he was requested to send the outstanding information.

Reply:

Given the very tight fiscal framework in 2023/24 and current problems such as the cost of the 2023 wage agreement, central government departments are re-opening discussions around rationalization of Departments (NMOG) and public entities. Whereas this process is starting up, there is at this stage no agreed upon list of entities that should be rationalized or closed. Thus, it would be premature to name any specific entities that might be under consideration. That said, government probably has far too many public entities especially given our fiscal circumstances.

Reply:

There has been no direct request from BRICS focusing on de-dollarisation. However, there were discussions and agreement in the BRICS Payments Task Force on the following focus areas for 2023:

a) Feasibility study on the implementation of the following elements of the G20 Crossborder Payments Roadmap:

• Building Block 1: The development of common cross-border payments vision and targets.
• Building Block 10: Improving access to payment systems by banks, non-banks and payment infrastructures – broadening the range of eligible candidates for settlement accounts by changing access policies, technical standards and supervisory or oversight regimes; and
• Building Block 14: Adopt a harmonised version of ISO 20022 for message formats (including rules for conversion/mapping) – promoting the adoption of common message formats, such as a harmonised version of ISO 20022 and common rules of mapping/converting data between different data formats.

b) The sharing of information on lessons from BRICS member countries on how sandboxes were operated; the aims of the sandboxes; how sandboxes are being utilised; some lessons learned and successes; and how sandboxes inform regulatory frameworks;

c) The sharing of experiences on central bank digital currencies (CBDCs) to draw lessons across the BRICS countries, look at the different experiences and to determine how central banks could leverage from the sharing of information; and

d) The BRICS member countries to consider, bilaterally, the interlinking of payment infrastructures for settlement in their own currencies.

The South African Government has also been approached by both Russia and India on areas of possible collaboration and cooperation, including the interlinking of payment insfrastructures for settlement in their own currencies. Preliminary discussions have taken place between the South African Reserve Bank and the central banks of the two countries (with the Indian Ambassador to South Africa being part of the delegation). The discussion with the Central Bank of the Russian Federation focussed on the interlinking of both the retail instant payment systems and settlement systems, while the engagements with the Reserve Bank of India were premised on the settlement systems interlinking, using their respective currencies.

The SARB guided that the interlinking discussions be held in abeyance until after the several domestic and regional payments initiatives led by the SARB have been concluded/implemented. These include the Real Time Gross Settlement System (RTGS) Renewal, the Association of African Central Banks (AACB) and the Southern African Development Community (SADC) initiatives. Additionally, progress and development will also be driven by the market’s appetite to settle in alternative currencies.

Reply:

In terms of the Government Gazette Notice No 3247 of 31 March 2023, the Minister of Finance granted a partial exemption from section 55(2)(b)(i) of the Public Finance Management Act, 1999 (Act No. 1 of 1999 – the Act) and Treasury Regulation 28.2.1 to ESKOM Holdings SOC Ltd in respect of the 2022/2023, 2023/2024 and 2024/2025 financial years. In terms of Government Notice No. 3270 of 6 April 2023, this exemption was withdrawn in its entirety, covering the 2022/2023, 2023/2024 and 2024/2025 financial years. The exemption would have applied and be still in be place had it not been withdrawn prior to the submission of the Annual Financial Statements to the auditors of Eskom and the National Treasury, i.e., two months after the end of the financial year as per section 55(1)(c) of the PFMA. For the 2022/2023 financial year, the date of submission was the 31 May 2023. Therefore, the withdrawal of the exemption on the 6th of April 2023 was possible.

After considering all public comments on the matter, the Minister of Finance has determined that ESKOM Holdings SOC Ltd not be granted a partial exemption from section 55(2)(b)(i) of the Public Finance Management Act (PFMA) and Treasury Regulation 28.2.1, from disclosing irregular, fruitless and wasteful expenditure, and material losses from criminal conduct in its Annual Financial Statements. Please refer to the attached media statement dated 7 June 2023 covering the Minister of Finance’s decision on the ESKOM Holdings SOC Ltd PFMA exemption.

Reply:

a) The National Treasury has engaged with the Auditor-General and considered all public comments received through Government Gazette General Notice No. 3270 of 6 April 2023 which withdrew the Government Gazette General Notice No. 3247 of 31 March 2023 and invited public comment on a proposed exemption for Eskom. In total, fifty-six (56) comments were received, with twenty-three (23) comments received in formal correspondence and thirty-three (33) comments received through emails, covering a broad spectrum of accounting and reporting, auditing, governance, legal principles, and public interest issues have been duly considered. The National Treasury also engaged with audit firms, professional auditing and accounting bodies, a rating agency, and other relevant authorities to discuss the challenges and seemingly onerous compliance reporting requirements applicable to State-Owned Entities such as Eskom.

b) The consultation methods used for the consultations were in the form of online stakeholder engagement meetings, webinars, media statements and Government Gazette Notice for public comments. Please refer to the attached media statement dated 7 June 2023, in which the Minister of Finance has determined that Eskom not be granted a partial exemption from section 55(2)(b)(i) of the Public Finance Management Act (PFMA) and Treasury Regulation 28.2.1, from disclosing irregular, fruitless and wasteful expenditure and material losses from criminal conduct in its Annual Financial Statements.

Reply:

No, as the law does not allow for such exemptions in line with the principle that all residents earning an income, be they the President, a worker or a businessperson, are subject to our tax laws without exception. We recognise the role played by healthcare officials is significant in ensuring provision of efficient and adequate healthcare to the public, as well in ensuring the provision healthcare as a basic human right. The provision of public healthcare services is a public good that is funded by Government and such funds are raised through the levying of taxes.

The levying of taxation is a crucial mechanism utilised to generate revenue as part of country’s flagship fiscal policy. One of the linchpins of a good tax system is the principle of equity, which incorporates the concept of horizontal equity. Horizontal equity ensures that all taxpayers who receive employment or other income are taxed the same based on their ability to pay, irrespective of their vocation. Low-income taxpayers earning below R91 250 are also exempt from Personal Income Tax.

Based on the fact that the South African personal income tax system is progressive in nature, the exemption of a group of taxpayers based on their profession would be impractical and go against the principles of a good tax system. Marginal tax rates that increase with income and rebates that apply equally to all taxpayers, are the main tools to give expression to society’s preference to give relief for lower incomes through the tax system. Lastly, it will impede the fiscus, as it will negatively impact the ability to raise sufficient revenue to fund Government social programmes.

Reply:

No, as the law does not allow for such exemptions in line with the principle that all residents earning an income, be they the President, a worker or a businessperson, are subject to our tax laws without exception. We recognise role played by the police is significant in ensuring public order, as well in ensuring the safety and security of citizens as a basic human right. The provision of safety and security as a public good that is funded by Government and such funds are raised through the levying of taxes.

The levying of taxation is a crucial mechanism utilised to generate revenue as part of country’s flagship fiscal policy. One of the linchpins of a good tax system is the principle of equity, which incorporates the concept of horizontal equity. Horizontal equity ensures that all taxpayers who receive employment or other income are taxed the same based on their ability to pay, irrespective of their vocation. Low-income taxpayers earning below R91 250 are also exempt from Personal Income Tax.

Based on the fact that the South African personal income tax system is progressive in nature, the exemption of a group of taxpayers based on their profession would be impractical and go against the principles of a good tax system. Marginal tax rates that increase with income and rebates that apply equally to all taxpayers, are the main tools to give expression to society’s preference to give relief for lower incomes through the tax system. Lastly, it will impede the fiscus, as it will negatively impact the ability to raise sufficient revenue to fund Government social programmes.