Questions and Replies

Reply:

We have no evidence of the manipulation of the Rand, and invite the Honourable Member to provide any evidence he may have of such manipulation. The currency market is a deep and liquid market, and it is difficult to determine any material or long-lasting impact of any one transaction on the level or value of the currency. I am therefore not able to respond to the question on the impact on revenue collection.

It is important to differentiate between the impact of any transaction on consumers and the impact on the value of the rand – current cases before the Competition Commission appear to be related more to the conduct of bank traders towards clients, rather than providing evidence of affecting the actual value of the rand, but let us await the outcome of that investigation before making any conclusions.

 

Reply:

Yes, the implementation of the Public Service Co-ordinating Bargaining Council Resolution included employees in Programme 1.

(a) (i) 18 employees in Programme 1 qualified; and

(ii) 48 employees did not qualify.

(b) The DPSA Circular 4 of 2014, a Directive on the amendment to the implementation of the PSCBC Resolution 3 of 2009 and the grading of jobs/posts on salary levels 9/10 and 11/12, directed that the automatic upgrades should be implemented for employees who were appointed between 1 July 2010 and 31 July 2012, the 48 employees who did not qualify were appointed after the said date.

The National Treasury consulted with the Minister for the Public Service and Administration (MPSA) on the grading of the positions of 48 employees who were appointed on or after 1 August 2012, as per the DPSA Circular 4 of 2014. The affected positions were subsequently verified by the DPSA and retained on salary levels 9 and 11 respectively.

Reply:

NATIONAL TREASURY

1. (a) No

(i) Number of contracts signed	(ii) Date on which each contract was signed	(iii) Duration of each contract	(iv) What services did the company render?	(v) Monetary value of each contract in each case
Nil One purchase order issued	Order issued on 1 June 2015	3 days	Security Services at the Cape Town International Airport for the World Economic Forum	R30 369.60

 

2. No

ASB

The Accounting Standards Board did not contract the services of BOSASA now known as GLOBAL OPERATIONS in any of the past 10 financial years to date.

CBDA

The Co-operative Banks Development Agency has never contracted the services of Bosasa now known as Global Operations.

DBSA

1. None
2. None

FAIS OMBUD

Inspection of the FAIS Ombud database has revealed that NO contracts were entered into with the above mentioned supplier for the financial periods ending 1 March 2007 to date.

FIC

(1) The Financial Intelligence Centre did not contract BOSASA or Global Operations for any services in any of the past 10 financial years.

(i)(ii)(iii)(iv)(v) Not applicable.

(2) Not applicable.

FSCA

The Financial Sector Conduct Authority (and the former Financial Services Board) has not contracted with the mentioned companies during the past 10 years.

GEPF

The GEPF has not contracted the services of BOSASA now known as Global Operations in the past 10 financial years.

GPAA

The GPAA has not done any business with BOSASA (GLOBAL OPERATIONS) for the said period.

IRBA

The IRBA hereby declares that no contracts were awarded to the abovementioned company in the past 10 Financial years.

LAND BANK

Land Bank has never contracted the services of Bosasa or Global Operations.

PFA

(1)(b) The Office of the Pension Funds Adjudicator has not contracted the services of Bosasa (now known as Global Operations) in the past 10 years.

(2) Not applicable.

PIC

The PIC during the last ten financial years did not contract the services of the company mentioned.

SARS

Question 1

SARS has never contracted with, BOSASA now known as GLOBAL OPERATIONS, for any security related services.

Question 2

N/A

SASRIA

For purposes of the question(s) raised above, Sasria SOC Ltd (“Sasria”) has not contracted the services of Bosasa now known as Global Operations (“Bosasa”), in each of the past ten financial years.

Whilst we have taken care, and exercised the necessary diligence in preparing the requested information, it is necessary that we highlight that, there is no information that seeks to indicate or suggest whether Bosasa was at any point directly or indirectly contracted to Sasria.

It is also common cause, that Sasria provides specialist short-term insurance products to its clients, which include but are not limited to insurance coverage from damage caused by non-political riots, public disorder, including labour disturbances, civil unrest, strikes, lockouts and terrorism, as well as loss in respect of mortgage loans. It would therefore follow, that Sasria would be in a position to have done business with Bosasa in this respect.

In the spirit of this, Sasria has therefore settled various insurance claims to Bosasa, and these are in the ordinary course of our business, and the said payments are neither services sought, nor contracts entered into, as the questions above specifically enquire on services entered into with Bosasa.

We hereby therefore, for purposes of transparency, disclose all the claims Bosasa has had with Sasria, and stress the fact that these are not services nor contracts entered into, but claims payments in the ordinary course of our business, as mandated.

Date (Payment)	Client	Service provided	Rand Value (Excl. VAT)	Duration	Irregular Expenditure
20 March 2012	Bosasa Operations (Pty) Ltd	Insurance Claim	R 131 578.95	N/A	N/A
14 November 2012	Bosasa Operations (Pty) Ltd	Insurance Claim	R 68 774.30	N/A	N/A
18 December 2013	Bosasa Operations (Pty) Ltd	Insurance Claim	R 318 533.67	N/A	N/A
12 August 2015	Bosasa Operations (Pty) Ltd	Insurance Claim	R 2 010 495.23	N/A	N/A

TAX OMBUD

1. The Office of the Tax Ombud did not contract any services of BOSASA now known as GLOBAL OPERATIONS in the past 10 financial years.
2. No irregular expenditure was recorded or condoned that relates to BOSASA now known as GLOBAL OPERATIONS.

Reply:

1. No signs of hacking were found. The possibility that Minister’s twitter account may have been hacked was raised in an interview, during which the journalist asked if Minister’s twitter account had been hacked. The response was that we did not know at the time how Minister had ended up liking the tweet in question, and that we were looking into the matter.
2. See response to question 1

Reply:

a) The Large Business Centre was decentralized as part of the new operating model that was adopted by SARS in 2016. SARS was of the view that decentralization will allow large businesses to have easy access to SARS offices throughout the country and by this enhance the service offering to the sector.

b) SARS took an executive decision to re-establish the Large Business segment after conducting diagnostic studies that showed the synergies and gains achieved when the Large Business Centre was centralised. The LBC will formally commence operations on 1 April 2019.

 

Reply:

What (a) amount has been designated for the purposes of (i) creating jobs and (ii) addressing unemployment in the Government’s national budget for the 2019-20 financial year

Public employment programmes are key components of the government’s drive to alleviate poverty, inequality and unemployment in South Africa. These programmes have a large multiplier effect on vulnerable communities by combining the social, environmental and economic objectives of employment generation, income support, and asset creation. Government has allocated a total of R15.4 billion in the national budget for the 2019/20 financial year towards addressing unemployment. This is mainly comprised of two public employment programmes, namely, the Expanded Public Works Programme (EPWP) (R14.6 billion) and the Jobs Fund now called the Employment Creation Facility Fund (R800 million).

The table below displays the breakdown of funds designated for the purposes of creating jobs in the 2019/20 financial year.

National departments (R'000)	13 807 428
Cooperative Governance and Traditional Affairs	4 038 608
Environmental Affairs	4 084 367
Labour	2 289 950
National Treasury	800 073
Public Works	1 812 036
Rural Development and Land Reform	411 153
Tourism	371 241
Provincial Departments (R'000)	1 586 094
Infrastructure Development	314 634
Public Works and Transport	1 271 460
GRAND TOTAL	15 393 522

Additionally, government launched the Youth Employment Service (YES) initiative in March 2018. This is a business-led initiative supported by government. It offers a quality one-year work experience to participating youth, coupled with training (both technical and behavioural) as well as boosting the access to networks relevant for finding the next job. It is complementary with government incentives such as the Employment Tax Incentive as well as custom Broad-based Black Economic Empowerment recognition work to further bolster the programme’s impact. The YES directly contributes to employment creation but does not have a direct allocation from the government.

 

(b) What are the details of each programme and/or department or entity that will benefit from these designations?

Within the EPWP, there are two main modalities through which public employment is funded. The first is through direct budgetary allocations, where public employment is an explicit part of the purpose. The second modality is where focus on employment is not the primary or stated aim of a given programme, but where there is scope for labour-intensive work as part of the programme design. Part of the rationale for the incentive grants is to encourage public bodies to look at their programmes through this prism.

The incentive grants of the EPWP were initiated to expand job creation in specific focus areas, where labour-incentive delivery methods can be maximised. The grants are made up of the following components:

In provinces:

• Infrastructure sector
• Environment and culture sector

In municipalities:

• Social sector
• Environment and culture
• Infrastructure

At national level:

• Environment and culture

While each of the grants vary slightly in terms of design, they share the following purposes:

• To strengthen job creation outcomes in specific focus areas
• To maximise the use of labour intensive methods
• To incentivise increased job creation efforts within public bodies by linking budget allocations from the grant to performance.
• To use the grant to incentivise increased use if core budgets and other conditional grants for the purposes of job creation.

The EPWP is carried out by the following government departments: Labour, Public Works, National Treasury, Agriculture, Forestry and Fisheries, Tourism, Environmental Affairs, Cooperative Governance and Rural Development and Land Reform. The Department of Public Works leads and coordinates the expanded public works programme, as articulated in government’s medium term strategic framework and the national development plan whilst the Jobs Fund is run directly by the National Treasury.

Complementing government’s broader job creation programmes, the Jobs Fund is a specific grant financing instrument that uses public funds to catalyse innovation and investment in activities that contribute to job creation initiatives and longer term employment growth. In March 2018 the Jobs Fund issued its eighth call for proposals which it hopes to complete by the first quarter of the 2019/20 financial year.

 

Reply:

Progress has been made on key interventions to restore policy certainty as outlined in the 2019 Budget Review. These include:

1. Visa amendments and immigration reform: Gazetted amendments to the Immigration Act (2002) will waive the requirement of an unabridged birth certificate for children traveling from certain countries. Revised requirements for business visas clarify the documentation and accreditations required. An e-visa system will be launched with New Zealand as the pilot case. It will then be rolled out to other countries. The scarce skills list will be updated by March 2019.

2. Mining policy: Government issued a new Mining Charter. The Minister of Mineral Resources has signaled that controversial amendments to the Mineral and Petroleum Resources Development Act (2002) are no longer in keeping with the policy intent. Separate legislation for the regulation of oil and gas is being developed and consultations with various stakeholders are under way.

3. Administered price review: The Department of Energy has invited the public to comment on the basic fuel price review until 31 March 2019. Stakeholder consultations are under way to identify ways to improve the efficiency and reduce the costs of ports and rail, making the country’s exports more competitive.

4. Procurement: The Public Procurement Bill is being finalised. It will consolidate various procurement laws into one national legislative framework. Provisions in the bill will encourage participation from black-, youth- and women-owned businesses in state procurement.

5. Telecommunications spectrum: The impasse on licensing has been resolved and licensing for high-demand spectrum will commence this year, with the process expected to be completed in 2020/21.

Prior to this, the 2018 Medium Term Budget Policy Statement reported progress on longstanding policy issues including:

1. Renewable energy: Eskom’s conclusion of 27 outstanding power-purchase agreements with independent power producers.

2. Energy planning: The reestablishment of a sustainable approach to energy planning by updating the Integrated Resource Plan for consideration by Parliament.

3. Land reform: Creating a panel to advise government on measures to effect fair and equitable land reform that will increase agricultural output and build self-sufficiency in food production.

Government is also acting decisively to mitigate the risks that Eskom poses to the economy and the public finances. The restructuring of the electricity sector and state support for Eskom’s balance sheet are central to a transparent and credible reform of the utility’s business model. This forms part of government’s broader agenda to restore good governance and financial stability at public institutions and state-owned companies.

Collectively, these efforts illustrate the progress made in providing policy certainty.

Reply:

In terms of section 160(1) of the Constitution, a municipal council, makes decisions concerning the exercise of all the powers and the performance of all the functions of the municipality. The Municipal Finance Management Act 56 0f 2003 (MFMA) was issued to provide municipal councils with the financial management legal framework to enable decision making, which includes amongst others, the management of the municipality’s bank account. The MFMA is applicable to both municipalities and municipal entities. The MFMA enables municipalities to open more than one bank account provided that initial allocations to the municipalities flows through the municipality’s primary bank account. The legislation is however silent on the issue of “ring fencing”, however, nothing stops the municipal council from adopting a written policy which enables the ring fencing of funds for purpose of defraying liabilities due towards Eskom.

An Inter-Ministerial Task Team, made up of officials from the National Treasury and the Department of Cooperative Governance, has been established to look at strategies to address the failure by municipalities to pay, amongst others, Eskom and Water Boards.

Over and above the Inter-Ministerial Task Team, both the national and provincial treasuries are assisting financially struggling municipalities to prepare financial recovery plans for implementation. This will assist towards ensuring that the municipalities are financial sustainable. It is also important that issue of regulations are also looked at in the context of the Constitution referred to above, namely, that the executive authority at local government is vested within the municipal councils. The National Treasury can therefore regulate to provide a framework for decision making, but the ultimate and final decision vest with the municipal council.

Reply:

a) The Commission has operated at all times in terms of a Presidential Proclamation (no 17 of 2018, published in Government Gazette 41652 of 24 May 2018) which set out the terms of reference for the Commission supplemented by regulations set out in Proclamation no 18 of 2018 (published in Government Gazette 41713 on 15 June 2019), as amended. There is no end-date for the Commission, but the terms of reference required a final report by 14 December 2018. Having met this deadline and issued its final report, the Commission is no longer active at this stage in terms of further hearings or reports, but Judge Nugent is concluding logistical arrangements like the cataloging and archiving of the Commission’s work or attending (where required, with other members of the Panel or evidence team) to requests like that of appearing before the Standing Committee on Finance on 13 February 2019. This logistical process commenced after delivery of the final report, and takes place at the premises that SARS made available to the Commission for its work.

b) There is no last day of the Commission, even though it is not actively functioning in terms of hearings or fact-finding. The President is expected to respond shortly to the recommendations of the Commission, and to provide clarity on a formal end-date for the Commission.

Reply:

Question 1

1. There are no economic indicators that measure the direct impact of the “land expropriation without compensation” debate on South Africa’s economic performance or its specific impact on the agricultural sector. However, there are indicators that collectively provide insight into the overall performance of the agricultural sector. These include: (i) gross capital formation in agriculture; (ii) profitability (net farm income); (iii) real value added in agriculture, forestry and fishing; (iv) farm mortgages; and the (v) agribusiness confidence index. None of these indicators are able to isolate the direct impact of the “land expropriation without compensation” debate.

1. Real gross fixed capital formation – a proxy for investment – peaked in 2013 and has been on a downward trend since.

2. Net farm income – a measure of farm profitability – has been growing since 2010. The data for 2017 and 2018 are not yet available.

3. Real value added in agriculture, forestry and fishing declined by 4.8 per cent in the first half of 2018 compared with the same period in 2017. Maize production eased following record output in 2017 and the drought continued to weigh down production in the Western Cape. The short-term outlook for the sector has improved due to higher rainfall in the Western Cape. The combined export value of crops such as citrus, grapes and macadamia nuts increased by an annual average of 7.5 per cent over the period 2015 to 2017.

4. New mortgage loans and re-advances granted on farms peaked in 2006 and has remained relatively flat since 2011. At the end of 2017 new mortgages on farms were at similar levels to those observed in 2013.

5. The Agbiz / IDC Agribusiness Confidence index fell to 42 index points in the fourth quarter of 2018 – its lowest level in 9 years. This was largely due to significant declines in the net operating income, general agricultural conditions and turnover sub-indices – suggesting that business conditions are driving changes in sentiment. The capital investment confidence sub-index increased, supported by increases in capital sales (specifically tractor sales which were 9 per cent higher in the first 10 months of 2018 in relation to the same period last year).

It is difficult to isolate the impact of the “land expropriation without compensation” debate on the agricultural sector or the broader economy on the basis of these indicators. Furthermore, the information revealed by these indicators about the agriculture sector is mixed and there are a number of other factors that influence sentiment in agriculture, including the cost of doing business, weather expectations and market conditions.

The government has allocated resources to conduct a general agricultural census (currently underway), to collect information that will provide further data on the dynamics in the sector to better inform policy making and support a viable, inclusive and productive agricultural sector.

2. As indicated, it is not possible to empirically isolate the impact of the debate on “land expropriation without compensation” and therefore not possible, at this stage, to presume any negative impacts on the economy.

3. In light of the above, at this stage it is not possible to assess the potential impact on tax revenues.

Reply:

1. No I have not, since the National Treasury does not have any evidence on whether there is any form of currency manipulation and hence not able to assess the impact of any alleged manipulation on illicit financial flows. The National Treasury has also checked that the South African Reserve Bank likewise does not have such evidence, and would like to invite the Honourable Member to provide any such evidence if she has any.

2. As stated above, neither the National Treasury nor the South African Reserve Bank have any evidence that any bank has taken part in currency manipulation. We are aware that the Competition Commission is investigating a case of price fixing and market allocation in the trading of foreign currency pairs involving the Rand, which it has referred to the Competition Tribunal for prosecution. The currency market is a deep and liquid market, and it is difficult to determine any material or long-lasting impact of any one transaction on the level or value of the currency.

It is also important to differentiate between the impact of any transaction on consumers and the impact on the value of the rand – current cases before the Competition Commission appear to be related more to the conduct of bank traders towards clients, rather than providing evidence of affecting the actual value of the rand, but let us await the outcome of that investigation before making any conclusions.

Reply:

1. (a) Mr (details provided) provided his services for free to the Nugent Commission of Inquiry and was therefore not paid for the work that he performed for the duration of the Commission.

(b) worked up to 30 November 2018 without remuneration.

2. (a) Advocate was paid a total amount of R1 869 300.00 at a rate of R18 000.00 per day for the work of the Commission and for 104 days.

(b) Advocate last day of remunerated work paid was 30 October 2018, and must still submit an invoice for work performed in November 2018.

3. (a) has not been remunerated to date, however he has submitted invoices in January 2019 for the amount of R842 292.00

(ii) has performed remunerated worked until 11 December 2018.

Reply:

No.

Reply:

1. No
2. Not applicable.

Reply:

According to the SARS records the person has a grade 12 qualification. At the time of his appointment to SARS it was not the practice to verify the qualifications. His qualifications have therefore not been verified by SARS.

Reply:

NATIONAL TREASURY

(a) No

(i)(ii) N/A

ASB

The Accounting Standards Board has not contracted the services of any of the companies.

CBDA

The Co-operative Banks Development Agency has not contracted the services of any of the companies.

DBSA

(b) No.

(i) NIL

(ii) N/A

FIC

(b) The Financial Intelligence Centre has not contracted any services of companies as listed.

(i) Not applicable.

(ii) Not applicable.

FAIS OMBUD

Based on our records and scrutiny of the system, the FAIS Ombud can confirm that no contracts or services were utilized from the service providers listed.

FSCA

The Financial Sector Conduct Authority (including the former Financial Services Board) has never engaged the entities named as their service providers or suppliers.

GEPF

The GEPF has not contracted any of the entities.

GPAA

According to our records, the Government Pensions Administration Agency and GEPF have no records of the above companies in our system.

IRBA

The IRBA hereby declares that we have not contracted any of the services from the companies listed.

PFA

Based on the information available at my disposal, the Office of the Pension Funds Adjudicator has never contracted the services of the companies listed.

LAND BANK

Land Bank does not have any contracts in place with any of the companies listed above.

We have, however, utilized Eavesdropping Detection Services which is a division of Corporate Business and Insight Awareness on a once-off basis for confidential work for Technical Surveillance Counter Measures. This order was placed in December 2018. Payment of R53 241.32 was made to Corporate Business and Insight Awareness on 21 January 2019.

Corporate Business Insight and Awareness is a new supplier on our database and all the necessary screening including AML was conducted prior to them being loaded.

PIC

The Public Investment Corporation (PIC) contracted the services of Corporate Business Insight and Awareness (CBIA) in the 2014/15 financial year.

(i) The total monetary value was R20 621.00.

(ii) This was a once-off assignment.

SARS

According to the SARS financial systems:

1. There is no indication that SARS contracted with Eavesdropping Detection Solutions (EDS.

2. There is no indication that SARS contracted with Cell Detect; or Business Espionage Countermeasures South Africa (BECSA).

3. SARS did make purchases from the vendor named Corporate Business Insight and Awareness (CBIA). The total payments made to CBIA are indicated below and these date back to the Financial Year 2006/2007 until Financial Year 2014/2015.

2006/2007	2009/2010	2010/2011	2011/2012	2012/2013	2013/2014	2014/2015	Grand Total
70 965.00	737 891.00	54 720.00	68 628.00	640 779.80	501 962.52	264 528.42	2 339 474.74

SASRIA

Sasria SOC Ltd is currently (and had previously) not contracted the services of the following companies:

TAX OMBUD

The Office of the Tax Ombud did not conduct any business or award any tender to any of the aforementioned companies.

Reply:

As advised by the Prudential Authority at the SA Reserve Bank, there were no payments made by the Prudential Authority (which managed the VBS curatorship) to certain person (name furnished), but were made to the curator SizweNtsalubaGobodo Advisory Services (Pty) Limited (SNG). A certain person (name furnished) acts as the representative for the curator. The total cost of curatorship for the period 12 March 2018 to 12 November 2018 amounted to R21,6 million, excluding VAT. VBS was placed in liquidation on 13 November 2018, so the curatorship ended on 12 November 2018.

The Prudential Authority of the South African Reserve Bank (which took over the role of regulator from the Registrar on 1 April 2018) implemented various governance arrangements pertaining to the cost of curatorship at the commencement of the curatorship assignment. The governance arrangements include, inter alia, an agreement on charge-out rates, instituting a limit pertaining to the total curatorship fees for the initial 12-month period of the curatorship, as well as the management of potential conflict of interest that may arise from using other service providers.

Reply:

a) No

b) SA Revenue Service contracted the services of the Public Affairs Research Institute in 2011. This followed a request for quotation, RFQ 39/2010 for purposes of conducting a SARS Corruption Study on a national basis. This was awarded on the 02 February 2011 to the value of R799,755.00.

Reply:

(1)(a)(i)   The estimated loss of tax revenue due to the illicit trade in tobacco products for the 2015/16 financial year was R6 billion compared to the estimated loss of R 4.1 billion for the 2014/15 financial year.

(ii)(iii) The estimated loss of tax revenue due to the illicit trade in tobacco products for the 2016/17 and 2017/18 financial year has not been concluded as yet.

(b) Steps taken by SARS to ensure that all taxes on the trade in tobacco products in South Africa are paid are:

• SARS conducted Integrated Audits on the Tobacco industry for years up until 2015.

• Amending section 113 of the Customs and Excise Act, 1964, (the Act) with effect from 19 January 2017 to prohibit the importation of cigarettes with a mass of more than 1.2 kilogram per 1 000 cigarettes, and the manufacture of cigarettes of which the mass of the tobacco content exceeds 0.9 kilogram per 1 000 cigarettes.

• SARS is finalising a draft rule amendment to the Act that will be published for public comment shortly to require functional tamper-proof product counters on all the tobacco manufacturing equipment used by the industry at any licensed tobacco excise manufacturing warehouse in the country.

• SARS is in the process of modernising its current fiscal marker and implement technology that will provide information to SARS to enable SARS to track and trace cigarettes that are manufactured throughout the value chain.

• SARS has an integrated Audit team that was established to audit traders across multiple taxes.

There is an increased focus on illicit tobacco and cigarette trade using a multi-pronged approach that includes:

• Establishment of the Illicit Economy Unit with a multi-disciplinary team investigating allegations of non-compliance in the tobacco industry.
• Integrated audits are performed by the Excise team.
• Reviews of the existing licences are conducted in line with the new measure that is under consideration for implementation.
• Targeted port risk alerts driven interventions on raw tobacco in order to follow the trail from foreign exporter to the consignee who is either the manufacturer of the importer who supplies the manufacturer, to ensure that we can align any thread of imported raw tobacco to the volumes of production per manufacturer.
• Audit and inspections are being conducted on cigarette manufacturing machines to ensure that SARS has sight of manufacturing equipment and its production capacity.
• Policy review is being envisaged to enforce the cigarette manufacturing machines counters usage, with possible withdrawal of licences should the counter be found not to be operational.
• Increased inspections at targeted areas identified as being high risk regarding suspected illicit cigarettes sold.
• Deployment of Customs inspectors at the manufacturing sites to inspect, monitor, record and develop an understanding of the entire manufacturing value chain from raw materials that form the inputs into production and the final products in relation to the excise account declared.

(2)(a)(b)  SARS does research on a regular basis aligned to its strategic approach and focus.

In line with this approach SARS is in the process of conducting research into the tobacco industry.

Reply:

a) While SARS has taken some strides towards implementing the recommendations of the Commission of Inquiry and is in engagement concerning others, there are certain recommendations that require Presidential approval and collaboration with National Treasury. However, from the time that the erstwhile Commissioner was suspended and the Acting Commissioner was appointed, SARS sought to repair and improve the administration of tax. The proceedings of the Nugent Commission of Inquiry ran concurrently with these endeavours taken by the Acting Commissioner and some of the recommendations made by the Commission of Inquiry echo some of the initiatives started by the Acting Commissioner.  This includes re-establishing a healthy reporting relationship between the Minister of Finance and SARS and the formation of the Illicit Economy Unit, the Unit focusing on Large Business, and more recently, a Unit to assess and analyze taxpayer compliance levels.

b) The function to plan, facilitate and monitor implementation of the Commission’s recommendations will be assigned to a small unit that continues with this work, and which will report their progress to the permanent Commissioner.

Reply:

1. The National Treasury confirms that a full investigation was conducted in keeping with the Public Protector remedial action and a comprehensive report finalised on the privatisation of the Venda Pension Funds. The comprehensive report provides detail on the historical background, the process followed during the investigation in line with the Implementation Plan and findings thereof. The Implementation Plan was agreed by National Treasury and the Public Protector; and submitted to the Speaker of the National Assembly for monitoring.

2. The Minister of Finance submitted the final comprehensive report on behalf of the State to Parliament and Public Protector on the 4th December 2018. The National Treasury awaits further communication and guidance from the Speaker of the National Assembly and Public Protector on this matter.

Reply:

NATIONAL TREASURY

(a) 10 Non-compulsory briefing sessions were held in 2018.

(b) Nil

ASB

The Accounting Standards Board held no tender briefings in 2018, as none of the goods and services procured meet the requirements for issuing tenders.

CBDA

In the 2018/19 financial year the Co-operative Banks Development Agency (CBDA) did not have any tender briefings.

The only tender briefing held by the CBDA was in the 2017/18 financial year, with tender number: NT 013-1-2017 and it was a non-compulsory briefing session.

FAIS OMBUD

The Office of the Ombud for Financial Services Providers (FAIS Ombud) would like to confirm that o tender briefings were held for the period 1 January 2018 to 31 December 2018.

FIC

(a) The FIC held 3 tender briefing sessions.

(b) All three (3) briefing sessions were compulsory

FSCA

(a) Eleven (11) briefing sessions were held.

(b) Seven (7) thereof were compulsory.

GEPF

(a) The GEPF held the following compulsory tender briefing meeting from 1 January 2018 – 31 December 2018:

• Strategic Investment Advisory Service
• Legal Services
• External Auditors

(b) The tender briefings were compulsory

GPAA

The Government Pensions Administration Agency had eleven compulsory briefing sessions in 2018.

IRBA

1. One tender briefing session was held in 2018;
2. The session was compulsory.

LAND BANK

Land Bank had 17 compulsory briefing sessions in 2018

PFA

The Office of the Pension Funds Adjudicator had 3 tender briefings for 2018 and were all not compulsory for prospective bidders to attend. The tenders relate to the procurement of Information Technology Infrastructure and Public Relations consultancy services.

PIC

(a) The PIC had 15 tender briefing sessions in 2018:

• Open Tenders – 14 briefing sessions; and
• Closed Bids – 1 briefing session.

(b) All of the briefing sessions stated above were compulsory.

SARS

(a)(i) NT to respond

(ii) SARS issued 31 tenders for the period 1 January 2018 to 31 December 2018.

(b) Out of the 31 tenders, 22 had tender briefings with 9 being compulsory and 13 being non-

compulsory.

SASRIA

Sasria SOC Ltd has not had any tender briefings during the period 01 April 2017 up to 31 March 2018.

TAX OMBUD

a) Only one (1) tender briefing was held in the year 2017/18 financial year and none in 2018/2019 financial year.

b) Yes, the tender briefing in 2017/2018 was compulsory.

Reply:

(1) The GEPF has already provided a detailed response to a similar question in broad terms which applies to detailed investment monitoring, refer to the response provided to Question Number: 1220 [NW1316E] dated 2 May 2018.

The GEPF and PIC have entered into a formal arrangement stipulating the terms under which the PIC is authorised to manage the assets of the GEPF. The Trustees have implemented variouis the monitoring and compliance measures to enable them to effectively discharge their fiduciary duty of investment monitoring. The Board has constituted permanent committees and sub-committeees to give effect to its strategic functions, including investment monitoring. All the committees have formal terms of reference that clearly set out the mandate and duties of the each committee. These are briefly described below.

Board Committees:

1. The Investment Committee is a committee of the Board whose duty includes monitoring the Investment Managers’ investments, including the PIC. Part of the investment committee’s duty is to consider various factors including any changes in the Fund’s liabilities as reported by the Fund’s Valuator, and any changes in the expected return on the Fund’s assets, the likely volatility of the value of the Fund’s assets and any implications those changes may have on the funding level of the Fund, contribution requirements, or benefits of the Fund, including but not limited to:

• • Monitoring and reviewing the performance of Investment Manager(s) primarily the PIC, to assure compliance with policy, procedures, risk and return objectives as set out in their mandate(s);
• Monitoring investment performance. The investment committee ensures that an independent review and evaluation of the performance of the investment portfolio is conducted at least quarterly.

• Reviewing quarterly investment reports and reporting where appropriate to the Board on issues that are considered important or relevant for Board deliberation.

2. Valuations Sub-Committee: The Valuations sub-committee is a sub-committee of the Finance and Audit Committee and reports into the Finance and Audit Committee of the Board and the Investment Committee. The Valuations sub-committee has been established to advise the Fund on the relatively complex matter of the valuation of the unlisted investments of the Fund managed by the PIC.

Management Committees:

1. The GEPF/ PIC Investment Liaison Committee: The purpose of the Investment Liaison Committee is to bridge the gap between the PIC and GEPF’s Investment Committees with the implementation of the GEPF’s reporting requirements, resolution of queries and implementation of the investment strategy as set out in the investment mandate of the GEPF. The Investment Liaison Committee also facilitates smooth investment processes and ease the flow of information and communication between the GEPF, PIC, Government Pensions Administration Agency and any third party service providers of the GEPF on investment matters.There are monthly meetings that are augmented by more regular interaction as necessary.

2. The GEPF/ PIC Exco to Exco committee: The GEPF/PIC Exco-to-Exco was established to, subject to the direction of the Board of Directors, of both GEPF and PIC, exercise the powers and perform the duties conferred or imposed upon it by the Government Employees Pension Law. Part of the duties include oversight responsibilities in relation to the implementation of the GEPF Investment Management Agreement. There are monthly meetings that are augmented by more regular interaction as necessary.

3. ESG Working Committtee; The purpose of the ESG working committee is to address the environmental, social and governance matters within the PIC and GEPF Investment Committees in order to implement the Responsible Investment strategy as set out in the investment mandate and investment beliefs of the GEPF quartely.

(1) (a) The GEPF has not written-off its investment in Steinhoff and this is reflected at its current market value

(1) (b) The GEPF’s investment in Ayo Technologies is reflected at its current market value and has not been written-off.

(1) (c) The GEPF has not invested in Sagamartha.  

(1) (d) The Fund’s investment in Independent Media and VBS have been impaired and this is fully disclosed in the  GEPF’s 2017/18 Annual Report with their respective impairment amounts of R1058320000 and R374700000.

(2) Refer to the reply above.

(3) The PIC does not have to inform the GEPF of the investment that it makes provided that it’s within the mandate. Monitoring and reporting takes place as detailed above (answer to question 1).

Reply:

(1) All transactions entered into by the Public Investment Corporation (PIC) has to adhere to the mandate requirements of its clients. The money market mandate of the Government Employees Pension Fund (GEPF) allows for investments up to a 12 month tenure, whereas the capital market mandate allows for investments for a longer tenure. Both of the mandates for these asset classes explicitly state the credit rating of the issuer and/or the instrument being the main criteria for such investment. The Eskom loan in question was done on the explicit condition that the loan should be government guaranteed , which implies that it has the highest credit quality in the domestic ZAR denominated market.

(2) The GEPF’s mandate requirements for money market and capital market transactions are in line with acceptable industry norms and standards. The GEPF’s mandate was approved by the GEPF’s Board of Trustees. The mandates of all the clients of the PIC are also approved by the Financial Sector Conduct Authority (FSCA).

(3) The PIC’s Research and Project Development Team has conducted detailed research (“deep dive”) into Eskom.

(4) Due to the confidentiality of the information pertaining to the Eskom loan of R5 billion, the supporting documents cannot be made available. It should, however, be stated that this loan was granted on 1 February 2018 and repaid in full, with interest, on 1 March 2018.

Reply:

Although the Treasury would like to increase the child support grant (CSG) closer to or ideally to or above the food poverty line, progress on this is being constrained by the macro-economic environment and other factors driving grant expenditure.

Increasing the value of the CSG to the food poverty line would significantly assist poor households and by definition reduce the proportion of the population defined as poor. The 2018 budget included above inflation increases to the Child Support Grant (CSG), to compensate for the VAT increase. The CSG increased from R380 in 2017/18 to an average of R405 (R400 from April to September 2018 and R410 from October 2018 to March 2019) in 2018/19. This was an annual increase of 6.6% against estimated CPI of 4.9%.

However, in the 2019 budget, because of fiscal pressures and increasing beneficiary numbers, social grant values will increase in line with long term inflation. The CSG increases from an average of R405 in 2018/19 to R425 in 2019/20 (4.9%). Despite this, the budget for social grants increases by 7.5 per cent to R175.2 billion (of which R65 billion is for CSG) in 2019/20 and exceeds R200 billion (of which R76 billion is for CSG) by 2021/22. Factored into the budget is also an increase in beneficiary coverage. In particular:

• The demographic aging of the SA population by >3% per annum or 120,000 elderly persons per annum costs an additional R2.5 billion rising to R2.8 billion per annum over the MTEF.
• The number of CSG beneficiaries continues to rise by around 190,000 per annum costing an additional R1 billion per annum.
• The budget for social grants over the 2019 MTEF period also includes an allocation for a new policy proposal for a top-up CSG for double orphans, at a rate of 150% of the CSG (i.e. R615). Implementation is anticipated in 2020/21 with an initial budget of R344 million and growing to R1 billion in 2021/22.

Nevertheless, government would like in the long term to bring the CSG much closer to the food poverty line of R547 (StatsSA, 2018). Given the current 12.5 million beneficiaries, estimated to grow by about 190k per annum, raising CSG to the food poverty line will require additional allocations of R21 billion rising to R25 billion per annum. This is unfortunately not affordable at present.

Reply:

Water supply infrastructure is funded through various grants, including the Regional Bulk Infrastructure Grant, the Water Services Infrastructure Grant and the Municipal Infrastructure Grant. In metropolitan municipalities like the City of Tshwane, where these wards are located, the Urban Settlements Development Grant is a supplementary grant for municipal infrastructure services. The grant allocations are based on household backlogs and poverty weighted data.

The choice of which projects are funded from the Urban Settlements Development Grant is determined by metropolitan municipalities. Projects must be identified in the municipality’s Integrated Development Plan and then included in their Service Delivery and Budget Implementation Plan.

Reply:

This pensioners (Name furnished) monthly pension was paid from January 1993 to March 2018 to the following bank account number:

ABSA (Volkskas)

Branch: Adelaide

Account no: XXXXXXXXX

She was a member of the TEPF when she retired and a widow when she died, the monthly pension stopped with her death.

There is no further pension payable to anyone.

Reply:

(1) The PIC’s Social and Ethics Committee (SEC) has never considered the home loan that VBS Mutual Bank (VBS) granted to former President Zuma. According to media reports, VBS advanced a loan to Mr Zuma in September 2016. The PIC had no knowledge of, nor was it party to, that transaction. In August 2017, the transaction referred to in the reply to Parliamentary Question 2762, was referred to the SEC due to the negative media coverage that followed after VBS granted the home loan to Mr Zuma. The SEC had to assess the reputational risk for the PIC when investing in VBS.

(2) The PIC did not grant any loan to VBS to be used to lend money to former President Zuma.

The rest of the questions fall away.

Reply:

The Prudential Authority of the South African Reserve Bank has indicated to the National Treasury that the South African Reserve Bank did not serve VBS Mutual Bank with any (a) notice, (b) directive and/or (c) other correspondence in terms of section 5 of the Mutual Banks Act, Act 124 of 1993, in the period 1 January 2016 to 31 March 2018.

Section 5 of the Mutual Banks Act, 1993 (Act No. 124 of 1993) deals with the furnishing of information by mutual banks to the South African Reserve Bank (to the Prudential Authority or before 1 April 2018, the Registrar of Banks). It empowers the Prudential Authority (or previously, the Registrar) to direct a mutual bank or the holder of any interest in a mutual bank to provide it with information specified in a notice given to the mutual bank or the holder of the interest in the mutual bank, that the Prudential Authority (or previously, the Registrar) may reasonably require for the performance of the Prudential Authority’s (or previously, the Registrar’s) functions under the Mutual Banks Act.

The Prudential Authority (or previously the Registrar) may also direct a mutual bank or the holder of any interest in a mutual bank to provide it with a report by a public accountant as defined in section 1 of the Public Accountants’ and Auditors’ Act, 1991 (Act No. 80 of 1991), or by any other person with appropriate professional skill, on any relevant matter, to provide it with such information.

Reply:

Under this new bursary scheme where funded students are not required to pay back money, the scheme is reliant on an allocation from the fiscus to meet its obligation to students in line with government’s commitment in this regard. Thus, any shortfalls, should they arise, will be met by the fiscus in line with resources available in the fiscal framework.

Reply:

The South African Reserve Bank publishes information on our gold reserves every month, which can be accessed from its website. In particular, for this question, I refer you to the following link on its website:

https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/8974/GoldFXReserves_November2018.pdf.

I also refer the Honourable Member to the previous response to his question PQ2333 (as published on 19 June 2015).

1. (a) The value of the official gold reserves as at 31 October 2018 was US$4,9 billion (ZAR72,4 billion) (as outlined in the above monthly release), which is approximately 4 million fine ounces.

(b) The SARB holds a large percentage of South Africa’s gold reserves in vaults of official sector institutions at offshore bullion centres, while a smaller amount is held locally. It is operationally efficient to store gold at offshore bullion centres should the need arise to conduct gold transactions. The exact percentage allocation per location is not made public.

(c) There is no material transportation cost incurred currently, as the bulk of the gold reserves were transferred to the respective places of storage in the 1990s.

(d) No particular procurement processes have been conducted in recent years as no service provider has been required for many years. In the past, the South Reserve Bank utilised government and state institutions to provide the necessary services.

2. The SARB performs monthly reconciliations on its gold reserves held at various centres, while senior SARB officials conduct due diligence visits as well as formal audits (which include sample verifications) at offshore centres, every three years and at local centres, on an annual basis. An audit of locally held gold is also conducted annually.

3. (a) 31 March 2004 (b) The South African Reserve Bank (c) USD423.00 (d)161.51 fine ounces (to put it into perspective, a standard gold bar weighs approximately 400 fine ounces) (e) A Bullion Bank (Nova Scotia) (f) Settlement of a gold swap transaction

Reply:

(1)(a) The artwork under the curatorship of National Treasury is recorded in its asset register and audited on an annual basis by the Auditor General of South Africa. There is no artwork owned by the rest of Government under the curatorship of National Treasury;

(1)(b) The National Treasury does not have any artwork under its control that meets the definition of Heritage Assets in accordance with Generally Recognised Accounting Practice 103.

(2)(a) During the past five financial years the National Treasury has not written off any artworks after completion of its physical verification process, due to loss or other reason. During the current financial year starting 1 April 2018 to date, no artwork has been found missing;

(2)(b) There is no applicable detail, as there is no missing artwork at the National Treasury.

Reply:

a) According to information at our disposal there are only two other mutual banks operating in South Africa which are:

1. GBS Mutual Bank; and
2. Finbond Mutual Bank.

There are no records of any municipal investments for 01 January 2009 to 30 June 2014. Based on municipal reports submitted to the National Treasury from 01 July 2014 to December 2018, there were no municipal investments in either GBS Mutual Bank or Finbond Mutual Bank.

b) In terms of section 7(2) of the PFMA the above-mentioned banks are not approved in writing by the National Treasury.

• Therefore, approval was not granted to national or provincial departments or national or provincial public entities to invest funds with these institutions.

In terms of section 7(3) of the PFMA Schedule 2 entities (SOE’s) may open bank accounts without the approval of the National treasury.

In terms of Treasury Regulation 31.2.1 The South African Library for the Blind reported that they held an account with GBS Mutual Bank. 

Reply:

(a)(i)(iii) and (b) No contract was awarded during the period 1 January 2015 to 31 December 2017.

Reply:

a) According to information at our disposal there are only two other mutual banks operating in South Africa which are:

(i) GBS Mutual Bank; and

(ii) Finbond Mutual Bank.

There are no records of any municipal investments for 01 January 2009 to 30 June 2014. Based on municipal reports submitted to the National Treasury from 01 July 2014 to December 2018, there were no municipal investments in either GBS Mutual Bank or Finbond Mutual Bank.

(b) In terms of section 7(2) of the PFMA the above-mentioned banks are not approved in writing by the National Treasury.

• Therefore, approval was not granted to national or provincial departments or national or provincial public entities to invest funds with these institutions.

In terms of section 7(3) of the PFMA Schedule 2 entities (SOE’s) may open bank accounts without the approval of the National treasury.

In terms of Treasury Regulation 31.2.1 The South African Library for the Blind reported that they held an account with GBS Mutual Bank. 

Reply:

The Co-operative Banks Development Agency had three (3) meetings in the 2016-17 financial year and five (5) board meetings in the 2017-18 financial year.

 

Reply:

The Acting Commissioner of SARS has informed me that SARS has no evidence of any such incident(s).

Reply:

a) SARS did not purchase a certain company (name furnished). A certain company (name furnished) was created and registered by SARS as a wholly owned State Owned Company (SOC) for the purpose of purchasing the business of Tatis Africa (Pty) Ltd and to employ the skilled staff of Tatis. Tatis Africa (Pty) Ltd subsequently changed its name to Tatis International (Pty) Ltd (Tatis), which comprised mainly of the intellectual property in the Tatis customs management solution software and its processes. A certain company (name furnished) also had to provide support and maintenance services to ADA (Luxembourg Customs), which at the time already had the software in operation. It was also intended to market the core customs solution through value-added resellers.

b) The Minister of Finance and Treasury approved the purchase of the business and assets of Tatis.

c) A certain company (name furnished) delivered the first phase of the modernisation programme to SARS in 2013, which is referred to as the iCBS (Interfront Customs and Border Management Solutions). It continued to support and maintain the iCBS, whilst at the same time adopting and modifying it by developing software for the new Customs Acts Programme.

Reply:

1 a) Yes, SARS replaced Oracle with BBD through a deviation process;

This was due to the fact that Oracle UK initially offered to review the offering against SARS’ requirements. Alternative proposals were put forward, but it quickly became apparent that SARS’ functional needs as agreed with Siebel, far exceeded what Oracle intended to deliver regarding scope, cost and implementation timelines.

b) The replacement was justified as follows:

Extensive discussions were conducted with Oracle in an attempt to rescue the transaction and bring it back in line with SARS’ original understanding, namely that it:

• be a turnkey solution including all required infrastructure, hardware/networks and integrated costs. The contractor would manage, for a fixed price and delivery timeline, the solution “end to end” and guarantee its performance when in production;

• be capped within the cost limit;

• Includes all the functionalities which formed part of Exco’s original understanding.

• Notwithstanding the fact that it was telephonically confirmed to SARS’ representatives by Oracle, Oracle was not willing to provide SARS with an undertaking in line with the above.

c) Accenture – came into SARS through a tender process in 2005 to appoint a strategic partner to assist SARS with the Modernisation Programme

The 2006 SARS records that have been reviewed by the current procurement leadership team reflects that the selection of the three entities (i.e. IBM, Accenture and BB&D) was based on the industry knowledge of the then Strategy, Modernisation and Technology senior staff. In circumstances relating to the replacement of the Oracle transaction BB&D was then chosen from the listed primarily because of price consideration.

2 a) The reason for not inviting competitive bids and instead extending the service providers’ contracts (i.e. Accenture, BB&D and others) was considered to be due to exceptional reasons which mainly centred on the need for natural continuation of the projects where previous work was carried out by the same service providers, thus presenting a clear advantage over competition. SARS wanted to also ensure consistent engagement with the same service providers in order to avoid a risk of information being disclosed to the public as the project was linked to taxpayer and SARS employee’ information.

b) The extensions of both Accenture and BBD were legal and compliant with the relevant legislation and regulations.

c) Accenture was selected through a tender process. BB&D was appointed through a deviation.

Reply:

a)  National Treasury submitted the draft reports to PRASA on 25 April 2017. The PRASA Board requested time to consider the reports until 31 October 2017. The National Treasury was informed that PRASA had discovered additional documentation that must also be subjected to investigation. However, feedback is still awaited from PRASA on the draft reports that were submitted during April 2017.

b)  The total amount spent on the 13 companies was R24 174 529.

Reply:

NATIONAL TREASURY

(1)(a)(i) 21 December 2016

(1)(a)(i)(b) Storage Technology Services (Pty) Ltd (StorTech)

(1)(a)(i)(c) R13,574,635.87

National Treasury shares infrastructure with Government Technical Advisory Centre and Co-operative Banks Development Agency.

(1)(a)(i)(d) Underlying IT Infrastructure that supports all applications and services, was upgraded.

(2)(a)(i) Maintenance of the IT systems is done within National Treasury.

(2)(a)(i)(b) N/a

ASB

1. The Accounting Standards Board uses off-the-shelf software without any amendments or modifications. All the computers were upgraded to Windows 10 on 26 October 2018. The upgrades were done by ITWindows CC and the cost of the upgrade was R10 062.50.

2. All IT maintenance is outsourced to ITWindows CC and the monthly fee is R5 500. The contract is for a twelve-month period, but can be cancelled with a 30-day notice period.

CBDA

CBDA uses National Treasury IT infrastructure at no cost. Please see information below provided by the National Treasury.

Date when the information technology (IT) infrastructure procurement	21-Dec-16
Name of Service Provider	Stortech
Value of Requisition	R 13,574,635.87
Nature of goods	Underlying IT Infrastructure that supports all applications and services was upgraded
Maintenance	In-house
Note:	CBDA shares infrastructure with GTAC and National Treasury hence costs are shared

DBSA

1. (a) (ii), (b) (c) (d)

DBSA applies the Supply Chain Management (SCM) processes of reviewing and inviting bidders for ICT services every three years (3 years). Provisions are in place to also re-evaluate sole source vendors on a minimum annual basis. The core ICT systems and ICT infrastructure purchases done is shown on Section 1 of the below table.

Section 1. Update / Term Contracts
Core Infrastructure	Vendor	Update Date	Contract End Date	Value	Comments
Servers and Storage	Puleng Technologies	Jul-14	N/A	R7,452,017.29	Capex purchase of IBM Server/Storage equipment.
Local Area Network	Bytes Technologies	Jul-14	N/A	R11,519,640.00	Capex purchase of Cisco Network equipment.
Wi-Fi Network	Bytes Technologies	Sep-17	N/A	R7,582,621.38	Capex purchase of Cisco Wi-Fi equipment.
Telephone System	Gijima	Jan-16	N/A	R4,211,373.77	Capex purchase of NEC Telephone system
Multifunction Printers	Dido	May-18	Apr-21	R6,874,929.00	3 year agreement for the provision of multi-function printers
Backup and DR Services	Global Continuity SA	Apr-18	Mar-21	R3,705,300.00	3 year agreement for the provision of data backup and disaster recovery services
Internet Bandwidth and related services	Internet Solutions	May-18	Apr-21	R9,564,256.68	3 year agreement for the provision of Internet Bandwidth, hosting, APN, video conference bridge and web content filtering
Core Systems	Vendor	Update Date	Contract End Date	Value	Comments
SAP	SAP	Jul-16	N/A	R5,133,120.25	Last major update on Human Capital, Financials, Loans, Procurement
Quantum (Treasury System)	FIS Global	Apr-18	N/A	R3,090,675.00	Last major upgrade due to IFRS 9

1. (a) (ii) (b)

The SCM processes are applied for ICT services for maintenance and support contracts. Section 2 and 3 covers the core ICT systems and ICT Infrastructure maintenance & support and licencing.

Section 2.Licenses
Software	Vendor	Contract Start Date	Contract End Date	Value	Update Frequency	Last Update	Comments
Microsoft Productivity Tools - DBSA	Microsoft	Jul-16	Jun-19	$597,296.79	Monthly	Oct-18	3 year agreement for Microsoft Windows, Office, SharePoint, Skype for Business, Data Centre and Client Access Licenses
Microsoft Productivity Tools - IDD	First Technologies	Oct-17	Sep-20	R1,705,089.39	Monthly	Oct-18	3 year agreement for Microsoft Windows, Office and Client access licenses. Subscription licenses procured to allow for flexibility
Microsoft Server licenses	Microsoft	Jul-17	Jun-20	$344,355.48	Monthly	Oct-18	3 year agreement for Microsoft SQL licenses
SAP Licenses (ERP)	SAP	Feb-09	N/A	R3,653,043.00	Annually	Aug-18	Country Legislative Changes (e.g. Tax, Budget, etc.) Vendor review conducted annually
Quantum (Treasury System) licenses	FIS Global	Dec-04	N/A	R1,900,000.00	OEM release schedule	Sep-18	OEM release schedule and Legislative (IFRS9) Vendor review conducted annually

Section 3. Maintenance and Support
Core Infrastructure	Vendor	Contract Start Date	Contract End Date	Value	Update Frequency	Last Update	Comments
Servers and Storage	IBM	May-17	May-19	R1,560,888.60	As per OEM release schedule	Jul-18	2 year maintenance contract for hardware and software support
Local Area Network	Datacentrix	Mar-18	Feb-21	R6,392,728.00	As per OEM release schedule	Aug-18	3 year maintenance for hardware and software support, combined into one contract including both Wi-Fi and LAN
Wi-Fi Network	Datacentrix	Mar-18	Feb-21		As per OEM release schedule	Jul-18
Core Systems	Vendor	Contract Start Date	Contract End Date	Value			Comments
SAP	Gijima	May-17	Apr-20	R14,645,493.55	Monthly	Oct-18	3-year support and maintenance of SAP system
Quantum (Treasury System)	FIS Global	Apr-17	N/A	R312,500.00		Apr-18	Annual support and maintenance fee

FAIS OMBUD

1. No upgrades being done.
2. (a) Hubtech Investment is currently responsible for the maintenance of the IT System

(b) R263 547.00

FIC

(1) The Financial Intelligence Centre’s information is as below:

(a)(ii) Year	(b) Supplier	(c) Value	(d) Description of  Infrastructure Hardware – Last 3 years
02/11/2015	Datacentrix	R 2 782 641.00	Cisco IPS
23/09/2015	Nambiti	R   169 269.20	Dell Server – Extra SQL host
04/12/2015	Sizwe	R   285 504.04	Cisco Routers
24/11/2015	Sithabile	R    315 903.39	Quantum Tape library
20/11/2015	Sizwe	R 1 534 947.64	Cisco Routers and Switches
24/03/2016	DEP Technologies	R    278 423.81	SAN storage upgrades
30/11/2016	Sizwe	R 2 607 191.95	Cisco Routers and Switches
16/10/2016	First Technology	R   187 567.85	VMWare Site recovery Manager
09/09/2016	DEP Technologies	R    225 818.82	VEEAM Backup software
02/12/2016	Edzenel Construction	R    160 611.06	Sophos firewalls
16/01/2017	JOS Electronics	R    142 249.18	Sophos Firewalls
16/02/2017	Dell	R    457 183.96	Dell Server Memory
23/03/2017	Sizwe	R 1 140 279.44	Video Conferencing equipment
27/08/2018	Data Science	R 6 556 109.01	Pure SAN storage

(2)(ii) The Financial Intelligence Centre’s information is as below:

(a) Supplier	(b) Value
Business Connexion	R 1 188 482.28
Tendai Group	R  124 200.00
DEP	R 166 200.00
SITA	R 522 105.46
Sizwe	R 109 997.00
Dell	R1 419 449.08

FSCA

There were several information technology (IT) infrastructures upgrades over the past 3-4 years and this upgrade was driven by the need to refresh the aging technology that was about to reach end of useful and support life and were becoming uneconomical to maintain.

1. (a) The Information Technology (IT) infrastructure at the FSCA was upgraded as follows:

• The server and storage infrastructure in the production and in the disaster recovery environments were upgraded in March 2016 and March 2017;

• The server and storage infrastructure in the development and User Acceptance testing environments were upgraded in March 2018;

• The security and network optimisation and load balancing infrastructure (F5) was upgraded in September 2017 and in February 2018;

• The first phase of the audio visual equipment took place in June 2017 and the second phase of the upgrade is in progress. It is anticipated to be completed in February 2019;

• The network infrastructure is in the process of being upgraded with the anticipated project completion date March 2019.

(b) and (c) The infrastructure upgrades were conducted by different companies and the names of the companies contracted to do so as well as the monetary values are as follows:

 

		( b )	( c )
IT infrastructure Upgrade	Date Completed	Contracted Company	Contract Value
Server infrastructure upgrade for the Production and DR environments	March 2016	Ubuntu Technologies	R 1 322 706.03
	March 2016	Bytes Systems Integration	R 697  766.43
	March 2017	Nambiti  Technologies	R 2 392 429.09
Server and storage infrastructure upgrade in the Non production environments. Additional servers for the Production and DR environments	March 2018	Aptronics (Pty) Ltd	R 13 586 783.61
Storage infrastructure for the production and DR environments	March 2016	Dell SA	R 7 930 160.00
Implementation of the wireless network at the FSCA head office	March 2017	Business Connexions	R 832 778.37
Server  and storage infrastructure for the new FSCA organization in the production and DR environments	March 2018	Aptronics (Pty) Ltd	R 7 959 089.16
Network virtualisation infrastructure (XSIGO) was replaced in the production environment	March 2018	Eclipse (Pty) Ltd	R 992 618.27
Security and network optimisation and load balancing infrastructure (F5 appliance ) in the production and DR environment	September 2017	XON (Pty) Ltd	R 3 907 780.18
	March 2018	XON (Pty) Ltd	R 8 181 600.01
Audio visual equipment in the process of being upgraded in the production environment	June 2017	VOX Telecoms	R 564 106.18
	March 2019	AE Solutions	R 2 372 507.50
Installation of server racks and network cabinets – Project in progress	March 2019	IT Master	R 2 005 954.60
Network infrastructure is in the process of being upgraded in the Non production, Production and DR environments	March 2019	Sizwe IT Group	R 4 661 860.89
Microsoft Skype for business is in the process of being upgraded pending approval	March 2019	Omega Solution	R 1 928 943.43

2. (a) The company contracted to maintain the IT systems, in particular the provision of desktop and infrastructure support services, is Aptronics (Pty) Ltd and the contract value is R30 million over a period of five years, which commenced on 09 December 2015.

GEPF

The Government Pensions Administration Agency provides ICT services to the GEPF.

GPAA

System	Last Upgraded	Name of company	Monetary Value of contract	Company currently responsible	Value of contract for current contract
1.CIVPEN	June 2014 (will be phased out/replaced by 2021)	Accenture	R 17 538 555	IBM (hardware is currently under a maintenance and support agreement with IBM until 30 September 2021)	R 4 812 506
2.ORACLE Infrastructure	March 2014 (Refresh planned for 2020)	Accenture	R 23 651 835	ORACLE (Currently under Oracle Premier Support until 31 March 2019 through SITA)	R 2 307 132
3.HP Infrastructure	April 2014 (Refresh planned for 2020)	EOH	R 23 995 085 Plus R 3 369 116	EOH (currently the equipment is still under a maintenance and Support contract with HP until 31 March 2020)	R 6 093 514 for all HP infrastructure

IRBA

Hardware

(1) (a) (ii) All significant hardware components are subject to the warranties from the manufacturer.

The Warranties still active no upgrades are required.

(b) Manufacturers are Dell and HP.

(c) Due to the warranty in place all defective parts are replaced at the cost of the manufacturer.

(d) Dell servers and HP switch.

(2) (a) (ii) Bytes Systems Integration a division of Altron TMT (Pty) Ltd.

(b) R4, 824 963.00 (Tender value from June 2017 to June 2022, a five year contract)

Software (Significant Systems)

(1) (a) (ii) Windows Server Updates - This is done weekly - 2 November 2018

FlowCentric - When updates are available - January 2016

AccPac - This is done annually - March 2018

(b) Windows Server Updates - Bytes Systems Integration

FlowCentric - FlowCentric (Pty) Ltd

AccPac - Lorge Consulting (Pty) Ltd

(c & d) Windows Server Updates - Included under 2 (b) under hardware

FlowCentric - R131 426.04 (2016)

AccPac - R30 245 (2018/19)

(2) (a) Windows Server Updates - Bytes Systems Integration

FlowCentric - FlowCentric (Pty) Ltd

AccPac - Lorge Consulting (Pty) Ltd

(b) Windows Server Updates - Included under 2 (b) under hardware

FlowCentric - R374 834 (Year to date)

AccPac - R8 115 (Previous financial year)

LAND BANK

Response to questions as follows:

• Question (1) – see link Annexure “A’
• Question (2) – see link Annexure “B”

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW3311_AnnexureB.pdf

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW3311_AnnexureB.pdf

 

PFA

(1) (a) July 2018

(b) Nambiti Technologies Pty (Ltd),

(c) Contract value amounts to R 983 040

(d) Provision of ICT equipment, installation and support for the data centre.

(2) (a)(ii) The Office of the Pension Funds Adjudicator has a service level agreement with the Financial Sector Conduct Authority for ICT support and maintenance. The following companies are used for ICT security management support:

• Computer Security and Forensic Solutions Pty (Ltd) – Network protection and events monitoring and management
• Check Point Software Technologies Ltd – Firewall management
• Securicom Ltd – Email security management

PIC

(1)

(2) Other than the companies mentioned above, the PIC does not have any company that is responsible for the maintenance of IT systems.

SARS

Question 1 response

The SARS ICT Infrastructure is used to provide both support functions as well as enabling core business functions (processes). It is a heterogeneous infrastructure landscape consisting of various technology architectures sourced through formal procurement vehicles.

The SARS strategy for ICT infrastructure renewal is based on a rolling upgrade cycle in terms of infrastructure that reaches end of life in a fiscal year. This is used to request budget but actual implementation is subject to final budget approval that is not guaranteed.

Renewal of infrastructure and providing infrastructure support is categorised and handled in the following ways:

SARS follows formal procurement process to establish ICT service provider towers for a minimum of 3 years. Each tower has a formally appointed vendor for the provisioning of ICT services within that category:

Tower	Scope	Service Provider
D	Data Carrier Services	IS
V	Voice Carrier Services	IS
I	Internet and Hosting Services	Vodacom
SMS	SMS Carrier Services	MTN & Telkom
N	Network Support Services	Sizwe
S	Server Support Services	Gijima
E	End-user Device Support Services	Sizwe

From an infrastructure refresh perspective, SARS uses the appointed vendors listed above in combination with formal procurement tenders established by the State Information Technology Agency (SITA Transversals), SARS administered tenders as well as formally approved National Treasury tenders and exemptions to refresh ICT infrastructure that has reached replacement status for each fiscal year.

In terms of question 1) above the following ICT Infrastructure was updated/upgraded.

2015/16 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Security infrastructure	R43 593 554,00	IBM
Infrastructure licensing	R 8 964 259,00	Microsoft
Enterprise data storage	R 8 160 694,00	IBM
Transport network infrastructure	R 6 725 590,00	Cisco
IT facility infrastructure	R9 173 409,00	BTS, Merque Communications
End User Devices	R 2 342 702,00	Dell, Lenovo
Voice networking infrastructure	R 7 966 854,00	Cisco
Midrange servers capacity upgrades	R 3 361 006,00	IBM
Audio visual equipment	R 517 803,00	Other
Total	R90 805 871,00

2016/17 Financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
* IBM Software renewal	R97 616 255,00	IBM
*Midrange Servers	R52 728 191,00	IBM
*Enterprise  data storage	R81 829 559,00	IBM & Ubuntu
*Mainframe replacement	R18 936 395,00	IBM
Commodity class servers	R17 754 055,00	Microsoft
Digital signage solution	R13 693 901,00	Bytes
End User Devices	R12 335 494,00	Dell, Lenovo
Transport network infrastructure	R 4 017 513,00	Cisco
Contact Centres data storage refresh	R 3 380 873,00	IBM
Microsoft software licences	R 2 599 525,00	Microsoft
Total	R304 891 761,00

* These items reflect the 3 year IBM Enterprise Agreement and are the reason for the big escalation in capital expenditure

2017/18 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Refresh of end of life commodity class servers	R24 133 311,57	Dell
Backup storage capacity upgrade	R 4 116 941,60	EMC
IT Facilities and Offices, Generators	R 4 968 616,30	BTS, Merque Communications
IBM WebSphere renewal	R 3 955 745,58	IBM
Personal Computers - Monitors, Laptops and Desktops refresh	R 3 304 820,64	Dell, Lenovo
SAP Licenses	R32 904 235,00	SAP
Casewise Enterprise Architecture tool	R5 999 757,00	Casewise
VMWARE software capacity	R2 675 570,00	VMware
Total	R 82 058 997,69

2018/19 financial year:

ICT Infrastructure CAPITAL Expenditure	Cost	Supplier
Personal Computers - Monitors, Laptops and Desktops refresh	R15 841 566,00	Dell, Lenovo
Refresh of end of life commodity class servers	R14 851 195,84	Dell
Renewal of Enterprise Content Management Maintenance Services	R12 036 532,50	OpenText
Network Infrastructure Refresh	R10 441 869,38	Cisco
Contact Centre Media Servers Renewal	R 7 230 810,25	Radisys
Casewise Enterprise Architecture tool	R 996 511,00	Casewise
IT Facilities and Offices, Generators	R 4 140 644,32	BTS, Merque Communications
Total	R65 539 129,29

The 2018/19 infrastructure expenditure does not show current projects in execution as this is only shown upon project completion. One such example is the renewal of the eFiling infrastructure and migration to the new data centre with a total estimated value of R 197 m. Another example is the equipment for the Disaster Recovery Facilities with a total estimated value of R54m. Both these projects are expected to be completed in April 2019.

Question 2 response

As per question 2 above and in addition to the infrastructure hardware and software that enables and support the SARS business, the following Business Systems are also maintained and supported by external vendors.

Period covered	Business System	Description	Supplier	2018/19 Average Annual Maintenance and Support Value	3 Yrs Contracts values
					BAU (Maintenance & Support)	Project and Capex	Procurement vehicle Total
01.01.2017 - 31.12.2019	eFiling	SARS premier digital channel for the submission of a variety of tax returns including VAT, PAYE, SDL, UIF, Income Tax, STC and Provisional Tax through the eFiling website.	Shandon Business Solutions	R 10 713 000	R 35 000 000	R 140 000 000	R 175 000 000
01.01.2017 - 31.12.2019	e@syFile™	SARS offline capability that assists the taxpayer to manage engagement with SARS and validate declarations in offline mode before sending them to SARS.	Ionize	R 15 659 000	R 50 000 000	R 45 000 000	R 95 000 000
01.01.2017 - 31.12.2019	ATP/Service Manager/IVR/Telephony/U3TM	A collective of integrated systems that offer Case Management, Workflows, Interactive Voice Response (IVR), Telephony for Contact Centres and Master Entity capabilities.	BBD	R 45 651 000	R 128 000 000	R 355 000 000	R 483 000 000
01.01.2016 - 31.12.2020	SAP (ERP, SRM, Sourcing, HR)	A collective of SAP modules that provide both revenue collection accounting functionality as well as corporate ERP (internal) capability.	SAP	R 35 196 000	R 129 796 838	R 160 554 000	R 290 350 838
01.01.2017 - 31.12.2019	iCBS (DPS, CPS)	The Customs ecosystem of capabilities to ensure processing of Customs declarations and other supporting functions	Interfront (SOC)	R 24 763 000	R 85 000 000	R 400 000 000	R 485 000 000
TOTALS **				R 131 982 000	R 427 796 838	R 1 100 554 000	R 1 528 350 838

** The above list does not include any SARS internally developed and maintained systems

** These totals are 3year procurement vehicle value

SASRIA

1. Please refer below, at Table 1 for a reply.

Date last updated	Company responsible for upgrades	Monetary value	IT system
2018/08/01	Darktrace and Antegina	R 500 000	New security monitoring system to enhance our security
2016/09/01	AlienVault SIEM	R 500 000	New security management tool for internal and external vulnerability
2018/10/01	Data Guardian	R 150 000	Windows Server Upgrade Project and Commvault Disaster Recovery Live Sync
2016 -2018	Internet Solution	R 1 200 000	Management of comprehensive internet solution. External firewall management
2017/04/01	Metrofile	R 141 072	Backup Storage
2019/06/	Dimension Data	R 350 000	Expansion of the Wi-Fi including new WiFiless devices, WI-FI Expansion Cisco ASA Firewall & VPN
2017/04/01	Ilanga	R 823 755	Annual IMS Services, Licenses and Maintenance
2018/04/01	DCX- Hewlett Packard/ESS Disaster Recovery/ DCX	R 225 014	Disaster Recovery Services and Hosting
2016/04/01	IDI Technology Solutions	R 23 000	GP- Great Plains Micro Dynamic Support and licenses
2018/04/01	Great Soft(Pty) Ltd	R 378 000	Subscription and Support to BoardPad Software
2017/06/30	GX Diesel	R 16 850	Generator Maintenance Services and Power generation
2014/05/26	Software AG South Africa (Pty)Ltd	R 498 000	ARIS Software Licenses, Support, Maintenance
2017/03/01	Seventynine Digital	R 41 400	Website Maintenance & Support
2016/10/06	Fraxion (Pty)Ltd	R 28 000	Fraxion Software License
2014/05/26	Software AG South Africa (Pty)Ltd	R 490 637	Renewal ARIS Software Licenses, Support, Maintenance
2018/02/01	Isometrix	R 94 000	Isometrix Upgrade & Annual Licenses
2018/04/01	Cortell Management Solutions	R 264 175	IBM Cognos Licenses renewals
2018/04/01	Intervate Solutions	R 980 000	Web Rates Calculator
2018/05/01	Dimension Data	R 110 000	WI-FI Expansion
2018/08/01	Dimension Data	R 150 000	Cisco ASA new Firewall & VPN upgrade
2018/08/01	Microsoft	R 1 100 000	New Office 365
2018/11/01	EOH	R 100 000	Cisco 3850 Catalyst Switches for network connectivity
2018/11/01	Bytes Technology	R 300 000	2x Brocade Fibre Switches to enhance storage capability
2018/11/01	Interconnect Systems	R 300 000	Setting up new office space: 34 Fricker Road, Cisco 3850 Catalyst Switches & WI-FI devices

 

TAX OMBUD

1. The Office of the Tax Ombud utilizes the SARS IT infrastructure. All updates or upgrades are done by SARS.
2. Maintenance of the IT systems is done by SARS.

Reply:

1. A certain person (name furnished) was recruited through the utilization of services of an employment agency; she commenced her duties as a Chief Officer - DIST at SARS on May 1, 2017. As per the recruitment policy of SARS in July 2016, prior her appointment a due diligence on her qualifications as indicated on her CV was conducted. A due diligence was conducted on the following qualifications prior her appointment and were Verified:

1. Diploma in Practical Accounting, Damelin, 1996
2. Diploma in Bookkeeping, Damelin, 1996
3. Diploma in Business Organization & Management, Damelin, 1997
4. Diploma in Personnel Training and Management, Damelin, 1997
5. Masters of Business Administration, University of North West, 2004

A due diligence was not conducted on the following foreign qualifications prior her appointment:

6. General Certificate of Education. University of Cambridge, 1985

7. Diploma in Information Technology, Square one, Data processing College, 1987.

SARS places responsibility for verification of Foreign Qualifications on the applicant through the South African Qualifications Authority and employment is conditional to these verifications.

2. Whether SARS found any inaccuracies; if so, what (a) are the relevant details and (b) action was taken to correct the person’s qualifications for the specified position?

• The General Certificate of Education issued by the University of Cambridge has been evaluated to be equivalent to NQF level 3 Intermediate Certificate by the South African Qualifications Authority. For ease of understanding the NQF level 3 Intermediate Certificate is equivalent to Grade 11 in the South African context. (Reference, SAQA National Qualifications Framework).

• With regards to the Diploma in Information Technology issued by Square one, Data processing College, the employee has not provided SARS with an evaluation result by SAQA of this qualification.

• The matter of the Employee’s qualifications has not yet been concluded as the employee is currently on an extended sick leave.

__

Reply:

1. The budget tabled in February provides for a contingency reserve for the three years of the medium term expenditure framework period. The contingency reserve is set aside, but not allocated in advance, to accommodate changes to the economic environment and to meet unforeseeable spending pressures. The contingency reserve for the outer years of the medium term expenditure framework period may also contain funds to effect policy priorities identified in subsequent budget processes which may include support for state-owned companies if the need arises.

In the middle of each fiscal year, the adjustments process provides an opportunity to make permissible revisions to the budget, in response to changes that have affected the planned government spending for that year. The adjusted budget may allocate unused funds, mainly from the contingency reserve, declared unspent funds, provisional allocation for contingencies not assigned to votes and projected underspending to offset additions to spending in form of roll-overs, unforeseeable and unavoidable expenditure, self-financing expenditure as well as any announcements made by the Minister of Finance in the budget speech for which allocations are to be made in the adjustments budget and additional amounts that have been approved for particular types of spending, if that be the case.

2. Yes. The following adjustments were tabled for the 2018/19 financial year:

Adjustments to vote appropriations amount to an increase of R12 063.2 million, of which:

unforeseeable and unavoidable expenditure	R 668.6 million
expenditure earmarked in the 2018 Budget speech for future allocation	R 9 687.9 million
roll-overs	R 258.0 million
self-financing expenditure	R 1 777.5 million
declared unspent funds (reductions to vote allocations)	R-328.8 million

Adjustments to estimates of direct charges against the National Revenue Fund amount to R1 372.7 million more than anticipated at the time of the budget, of which:

debt-service costs National Revenue Fund payments	R 975.0 million R 14.9 million
skills levy and sector education and training authorities	R 382.8 million

The adjustments to vote appropriations (R12.1 billion increase) and estimates of direct charges (R1.4 billion increase) are offset against the R6 billion provisional allocation for contingencies not assigned to votes and R8 billion contingency reserve set aside in the budget. In addition, the revised budget framework makes provision for approximately R2.7 billion in projected underspending at national government level, and R500 million in the local government repayment to the National Revenue Fund. The total estimated adjustments spending for 2018/19 thus decreases by R3.8 billion, from a budgeted R1 512.2 billion to a revised R1 508.4 billion.

The 2018 Adjusted Estimates of National Expenditure publication can be consulted for further information on each of the above adjustments.

3. (a) Over the 2019 MTEF R27billion has been set aside for the contingency reserve as follows

• 2019/20: R7 billion
• 2020/21: R8 billion
• 2021/22: R12 billion

b) The contingency reserve is part of the main budget fiscal framework

Reply:

1. I am not aware of an alleged payment of R150 million that was allegedly given to the members of the so called Rogue Unit.
2. The Acting Commissioner has consulted with his Finance Team and they have confirmed that there is no record of the alleged R150 million payment flowing through the SARS Bank Accounts.
3. The Acting-Commissioner furthermore informs me that to his knowledge, no installation of this nature occurred in the course of SARS operations and that no authority for the alleged installation was, as a result, requested from SARS or granted by SARS.

Reply:

(1)(a)(i) The Minister of Finance appointed Dr Monde Tom, as the Accounting Officer for Provincial Treasury in terms of section 36(3) of the Public Finance Management Act, 1999 (Act No. 01 of 1999). This Head official of Provincial Treasury [Accounting Officer] was also the lead coordinator [Chief Administrator] of the overall intervention team. In turn, Dr Tom, as the lead administrator, was supported by a team of treasury officials who were seconded to the Limpopo Provincial Treasury to lead line function programmes. These officials are, Mr Khaya Ntimbela [Sustainable Resource Management]; Mr Ndoda Biyela [Assets, Liability and Transversal SCM]; Mr Mbuyi Dondashe [Financial Governance]; Ms Venita Haupt [Corporate Services]; and Mr Siphiwe Ndlovu [Intervention Secretariat and Liaison Head Official], but later seconded to lead Corporate Services. .Other officials appointed in terms of section 36(3) as Accounting Officers, included the administrators in Education, Roads and Transport, as well as Public Works departments, with the exception of the Health administrator, whose appointment did not include the replacement, but to support the then Head of Department [Accounting Officer], who had recently been appointed.

The South African Revenue Services (SARS) was working with Office of the Chief Procurement Officer in the National Treasury to support procurement reforms.

(1)(b)(i) The Director-General of the National Treasury appointed consultants such as Deloitte, ESP Consulting, Price Waterhouse Cooper (PwC), Edward Nathan Sonnenbergs and Sizwe Ntsaluba Gobodo Auditors.

(1)(b)(ii) The timeframes for the appointments of the administrators and the secondment of support teams, as well as consultants, ranged from immediate to different intervals.

(1)(b)(iii) The treasury officials listed in paragraph (1)(a)(i) above were tasked to lead line function programmes in provincial treasury at Deputy Director-General level.

(1)(b)(iv) The positions of these officials ranged from lead administrator – heading the intervention and Accounting Officer, supported by the heads of programmes [DDGs] to execute treasury functions in terms of section 18 of the PFMA. These functions ranged from provincial budget preparation and oversight; revenue and cash management, transversal Supply Chain Management; overseeing of financial governance issues, dealing with audit issues; corporate services, to day-to-day treasury operations [HR/M, legal services etc.]; as well as providing secretariat services and liaison with stakeholders supporting the intervention. Each administrator had a team of support staff for effective implementation of the section 100(1)(b) intervention in each of the five provincial departments in Limpopo that were placed under administration.

The consultancy [Deloitte, ESP Consulting, PwC, ENSafrica and Sizwe Ntsaluba Gobodo], were appointed by National Treasury to support the intervention for verification of contracts and invoices, contract management and document review, and conducting forensic audits as well as forensic investigations where necessary.

The other appointments by the Minister of Finance, were those of administrators as Accounting Officers as requested by the Ministers responsible for those departments, namely, for the Department of Education – Mr Mzwandile Matthews; for the Department of Roads and Transport – Mr Mathabatha Mokonyama; and for the Department of Public Works – Mr B. Matutle, but later replaced by Mr Mbuyi Dondashe. Ms Valerie Rennie was appointed by the Minister of Health as an administrator, but was not recommended to the Minister of Finance for appointment as the Accounting Officer of the Department of Health in Limpopo.

(2) No, the Public Affairs Research Institute did not work with the administrators and National Treasury as part of the team, when the Limpopo provincial Department of Health was placed under administration.

Reply:

1. SARS is not able to accurately trace the number of declaration pertaining to capital progits on cryptocurrency

The existing income tax return forms currently do not make provision for taxpayers to specifically declare capital profits regarding cryptocurrency trades, however work is underway within SARS to consider the amendment of the tax forms for the 2019 tax season in order to cater for the description of other assets (which will include cryptocurrencies) by means of a specific description field on the form.

Taxpayers who have made some form of declarations regarding cryptocurrency trades, have captured such trade as a form of “other trade income” or “other trade loss”, and have made reference to a description of digital/crypto currency trading (e.g. Bitcoin Cash, Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) to name a few).

2. The South African Revenue Service (SARS) issued a media release on 6 April 2018 clarifying that it would apply normal income tax rules to cryptocurrencies.

In line with the announcement made in Annexure C of the 2018 Budget Review, the Taxation Laws Amendment Bill, 2018, proposes amendments with respect to the treatment of cryptocurrencies for income tax and value-added tax purposes.

These amendments ensure that that losses on cryptocurrencies may only be set off against profits from cryptocurrencies (otherwise known as ring-fencing), clarify that cryptocurrencies cannot be classed as personal use assets for capital gains tax purposes and treat cryptocurrencies as financial services for value-added tax purposes. Further, National

Treasury does not wish to pre-empt the work of the Intergovernmental Crypto Assets Regulatory Working Group (CAR WG). The CAR WG is looking into all aspects of cryptocurrencies, related blockchain concepts and use cases. This is being done with a view towards developing a cohesive governmental understanding and response to cryptocurrencies.

In keeping with the development of a unified intergovernmental regulatory framework, the CAR WG has broad intergovernmental representation and includes representatives from the Financial Intelligence Centre, Financial Sector Conduct Authority, National Treasury, SA Reserve Bank and SARS. It is anticipated that, following broad industry comment and participation, the CAR WG will be ready to release a final research paper on the subject during the course of 2019. The OECD/G20’s Inclusive Framework on BEPS is also working on the tax challenges arising from digitalisation, which include the issue of cryptocurrencies. An interim report was issued earlier this year (https://www.oecd-ilibrary.org/taxation/tax-challenges-arising-from-digitalisation-interim-report_9789264293083-en) with a view to issuing a final report in 2020.

3. N/A

Reply:

NATIONAL TREASURY

No contract was awarded since 1 January 2009.

GTAC

	PARI contracts awarded and payments made up to October 2018
	Contract Description	Duration		Amount paid
1	Provision of technical advisory services to the Eastern Cape Department of Education with the schools rationalisation project: knowledge management specialist	Nov 16 - Apr 19		999,798.61
2	The provision of action learning support to the Eastern Cape Department of Education turnaround project, focusing on supply chain improvement and culture change	Feb 14 - Feb 15		829,246.51
3	City Support Programme –Longitudinal studies, Case studies	Nov 14 - Nov 17		2,204,000.00
4	Expenditure and Performance Review of National Language Services - PanSALB, CRL and language services in the Dept of Arts & Culture	Nov 13- May 14		548,700.00
	Total payments made			4,581,746.12

SARS

a) SARS awarded a contract to PUBLIC AFFAIRS RESEARCH INSTITUTE on 02 February 2011. This was for services to conduct a SARS Corruption study at a National level on a once off basis.

b) An amount of R799 755.00 was paid once off in 2011 for the services rendered.

Reply:

A certain person (name furnished) was appointed as Chief Officer Strategy, Enforcement and Enablement (SEE) on the 1/02/2011. The appointment was based on his extensive experience in enforcement within the Security Cluster. When he commenced his employment at SARS in 1999 he was appointed at a Chief Director level.

It is understood that the SARS qualification framework at that time made provision for either minimum qualifications and/or a number of years relevant experience as requirements for appointment. A certain person (name furnished) was then appointed on the basis of his experience.

In the 2009 Financial year three Senior SARS staff were designated as Deputy Commissioners of which Mr Ivan Pillay was one. He was never appointed as Commissioner but only Acted in that role.

According to SARS records, a certain person (name furnished) holds a grade 12 qualification.

Date	Job Title	Department	Grade
1999/04/01	Chief Director	Investigation Administration	DPSA Level 14
2000/06/01	Chief Director	Comp Si  Head Office	DPSA Level 14
2000/07/01	GM: COMPLIANCE	Comp Si  Head Office	9
2004/01/24	GM:ENFORCEMENT & RISK	Cmd: Compliance	9
2005/04/01	GM:ENFORCEMENT & RISK	Enforcement	9
2011/01/01	Chief Officer: Enforcement & Compl Risk	Enforcement & Compliance Risk	9
2011/02/01	Deputy Commissioner / Chief Officer: SEE	Office of the Commissioner	9
2012/05/01	CO: Strategy Enablement & Enforcement	Office of the Commissioner	9
2013/10/01	CO: Strategy Enablement & Communication	Office of the Commissioner	9

Reply:

1. China has not reintroduced a gold standard for the Chinese Yuan. This issue has not been discussed under the auspices of the BRICS Finance Ministers and Central Bank Governors’ meetings.

2. The New Development Bank has already approved US$680 million in project financing for South Africa. In addition, the NDB employs 18 South African professionals both at the Africa Regional Centre (Sandown, South Africa) and at the bank’s headquarters (Shanghai, China).

Reply:

According to the information at the disposal of National Treasury, the City of Tshwane Metropolitan Municipality is the only municipality that has outsourced a function which was previously insourced. The function outsourced is Waste Management Services and this has been outsourced for a period of more than five (5) years. The expenditure incurred is about R500 million per annum. This particular service is outsourced to a panel of contractors.