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02 July 2020 - NW56

Profile picture: Brink, Mr C

Brink, Mr C to ask the Minister of Finance

(1)Whether, with reference to the presentation made to the Standing Committee on Public Accounts on 3 December 2019, he has found that section 71 of the Municipal Financial Management Act, Act 56 of 2003, reports produced by some municipalities are inaccurate, be they overstated or understated; (2) (a) which municipalities have in the past six months produced section 71 reports that are inaccurate and (b) what is the (i) nature and (ii) extent of the inaccuracy in each case; (3) what correspondence has National Treasury, alone or in conjunction with other departments, had with the specified municipalities in respect of inaccurate section 71 reports?

Reply:

(1) Yes, reporting through the section 71 reports have been inconsistent in the last months. There have been cases of overstatement and sometimes understatements but the former more prevalent. The newly regulated (1 July 2017) Municipal Standard Chart of Account (mSCOA) requires that municipalities upload their budget and financial information in a data string format to the Local Government portal across the six mSCOA regulated segments. This is the first municipal financial year that the section 71 report is compiled by using the figures from the mSCOA data strings. Previously (prior to 01 July 2019) the National Treasury allowed parallel reporting and used data from return forms that was submitted to the Local Government Database to prepare the section 71 reports. The introduction of the mSCOA is intended to improve reporting to a substantially accurate level in the future, however, most municipalities are still getting used to the mSCOA requirement, therefore, inconsistencies in the current reporting are observed. Municipalities are making an effort to submit credible section 71 reports.

(2)(a) In as far as the submission of credible data is concerned, the defaulting municipalities differ from month-to-month.

(2)(b)(i) At the core (nature) of the problem is:

  • The incorrect use of the mSCOA chart and municipal accounting practices by municipal officials;
  • Municipalities are not locking their adopted budgets or their financial systems at month-end to ensure prudent financial management;
  • Poor or no ICT upgrades (servers, hardware and software) and maintenance, resulting in the ICT environment not being able to cope with the modern technology required to implement mSCOA; and
  • Some municipalities are still not budgeting, transacting and reporting directly in or from their core financial systems. Instead they prepare their budgets and reports on excel spreadsheets and then import the excel spreadsheets into the system. Often this manipulation of data lead to unauthorised, irregular, fruitful and wasteful (UIFW) expenditure as well as fraud and corruption as the controls that are built into the core financial systems are not triggered and transactions go through that should not.

(2)(b)(ii) Before each quarterly Section 71 publication, the municipalities receive their submitted financial figures in the publication report format and are asked to verify the accuracy of the financial data. They are given 5 days to make any corrections. Publication reports are re-issued until the municipality is satisfied. The accuracy of section 71 information is then signed off by the respective Municipal Manager and Chief Financial Officer.

As the National Treasury has no access to municipal financial systems, inaccuracy of submissions compared to the figures carried within the financial systems cannot be determined. The signatures of the Municipal Manager and Chief Financial Officer indicate to the National Treasury that the municipality agrees with the representation of their figures in the Section 71 publication.

(3) The improvement of the credibility of the data strings is a priority for National and Provincial Treasuries and is analysed monthly upon successful submission of the data strings. The findings of the analysis are shared by the National and provincial treasuries with the respective municipalities. Municipalities are required to correct any errors in the data strings in the next month and non-compliance letters are send to those municipalities that are persistently not complying with the mSCOA Regulations. Technical assistance to correct errors and training are also provided to ensure that municipalities submit credible information.

02 July 2020 - NW497

Profile picture: Waters, Mr M

Waters, Mr M to ask the Minister of Finance

(1)What (a) is the name of each state-owned entity that paid dividends to the State in the past 10 financial years and (b) amount was paid in each financial year; (2) (a) what amount has been paid and/or granted to any specified state-owned entity over the past 10 financial years in respect of (i) bail outs and (ii) Government guarantees, (b) in which financial years were the payments made and (c) what is the name of each entity that received a bail out or guarantee?

Reply:

1. State-owned entities reporting to the Minister of Finance, namely, Public Investment Corporation (PIC) and South African Special Risk Insurance Association (SASRIA), paid dividends to the state in the last 10 years:

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2. Over the past 12 years, government has allocated about R162 billion to the financially distressed state-owned companies (SOCs). These allocations generally provide short-term support to the relevant distressed SOC as a result of various reasons. Of the total allocations, Eskom accounts for 82 per cent. In 2019/20, government allocated R49 billion to Eskom and committed R112 billion in the medium-term funding. For more details on the bail outs and government guarantees extended to each respective SOC, please refer to the attached annexure A and B.

02 July 2020 - NW971

Profile picture: Van Minnen, Ms BM

Van Minnen, Ms BM to ask the Minister of Finance

(a) What is the quantum of the Financial Management Grant that is administered by the National Treasury to strengthen the financial management capacity of the Madibeng Local Municipality, (b) what is the time period of the specified grant, (c) how is the grant administered and (d) what safeguards are in place to ensure that the grant is properly spent?

Reply:

a) The quantum of the Financial Management Grant to Madibeng Local Municipality amounted to R2 235 000 for the 2019/20 financial year, as published in the Division of Revenue Act.

b) This is a conditional grant and in terms of the framework covers a next three-year period.

c) The grant is administered through transfers to the municipality, reports received from the municipality, and is in terms of their municipal support plan.

d) Section 12 of the Division of Revenue Act provides the checks and balances as wll as the framework within which the grant is implemented. It also stipulates the roles and responsibility of the receiving officer. Municipalities must submit to NT regular reports on spending, which are aligned to their support plans. Moreover, the grant and its utilization is submit to the external audit process undertaken by the Office of the Auditor-General.

04 June 2020 - NW74

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

(1)What are the full circumstances which led to the Public Investment Corporation's purchase of the farm Palmietfontein 403, extent 547 hectares, and the Farm IP 564, extent 481 hectares, in the North West for the purchase price of R586 500 000; (2) whether he has found that there was no impropriety in this purchase; if not, how did he reach this conclusion; if so, what are the relevant details?

Reply:

(1) I am advised by the Public Investment Corporation (PIC) of the following:

The PIC, on behalf of its client, the Government Employees Pension Fund (GEPF), acquired a 60% undivided share in a property development in the City of Matlosana (Klerksdorp), named the N12 Development. A consortium approached the PIC for funding to buy the land. Since vacant land is not income generating, an investment of this nature by the PIC was impermissible as it would not generate cash flows to service debt. The PIC decided to participate as an equity investor, and acquired the undivided share and will use the development to grow the GEPF’s investment portfolio.

The development consists of two sites on the northern and southern sides of the N12 between Klerksdorp and Stilfontein of approximately 426.5ha and 979ha, respectively. 90% of the land has approval for the establishment of a township consisting of Business Rights (retail, office, car dealerships, etc.), Residential (low and medium density), Industrial, a school and a hospital.

The PIC records that it conducted a full due diligence process on the acquisition of the land. The due diligence was done by independent service providers and included the following:

  • Land Valuations; and
  • Town Planning.

Further to this, the PIC conducted Legal-, Risk and Environmental, Social and Governance (ESG) evaluations.

The Valuator used the comparable sales method of valuation that incorporated various development models. The Valuator concluded that the land be valued at an average of R2100/ha with a combined total of R2.010 billion for both portions of land. The PIC acquired a 60% undivided share in the development at a purchase price of R510 million (excluding VAT) – well below the R1.2 billion valuation for a 60% share, in terms of the independent market evaluation.

An amount of R306 million of the purchase price is being retained in an escrow account, to ensure that the developer can contribute their 40% of the development costs, as and when needed.

Isago@N12Development (PTY) Ltd., the co-owner and developer, entered into an agreement with the South African National Military Veterans Association (SANMVA) in terms of which SANMVA acquired a 1% shareholding in the investment. That shareholding and their 40% undivided share was transferred from Isago@N12Develoment (Pty) Ltd. to Isago Holdings (Pty) Ltd .

2) From the information recorded and provided by the PIC, as set out above, I have no basis to suspect any impropriety with the transaction.

04 June 2020 - NW73

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What is the position of the Board of the Public Investment Corporation on proposals by the Congress of South African Trade Unions, which are alleged to be supported by the Minister of Public Enterprises, to commandeer R254 billion in funds from the Government Employees Pension Fund for the purposes of writing down Eskom’s debt?

Reply:

At present, no formal proposals have been made to the Board of the Public Investment Corporation (PIC), the PIC management or to any client of the PIC, with respect to writing down Eskom’s debt, and therefore the Board cannot comment on this matter. However, it should be stated that as an asset manager, the PIC’s investment function is governed by specific terms in each of its clients’ investment mandates that are designed to further each client’s investment goals. In discharging its fiduciary duty to clients, the PIC assesses any investment proposal in line with client mandates. Investment decisions by the PIC, are based on the mandate-fit and the merits of each investment proposal, and aim to generate risk-adjusted financial and social returns for its clients.

02 June 2020 - NW854

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

What (a) number of applications has the SA Revenue Service received in each province for the waiving of penalties since 23 April 2020, (b) number of the specified applications have been approved in each province and (c) was the Rand value of the approved applications in each province?

Reply:

(a) The number of applications received is 2244,

(b) The number of applications approved across all provinces province is 72

Outcome

EASREN CAPE

FREE STATE

GAUTENG

KWA/ZULU NATAL

MPUMALANGA

Unknown

WESTERN CAPE

Grand Total

Invalid

76

30

803

91

13

 

148

1161

Unknown

3

3

25

8

2

465

5

511

Partially allow

4

7

234

13

 

 

35

293

disallow

2

1

139

28

 

 

7

177

Allowed

2

2

49

13

 

 

6

72

Withdraw

 

 

27

 

 

 

 

27

Reject

 

 

2

 

 

 

 

2

Accept

 

 

1

 

 

 

 

1

Grand total

87

43

128

153

15

465

201

2244

(c) Unfortunately we cannot provide the rand value at this point of time, as the cases do not show for which period/tax year the request was. An extract for the journals from our core systems would have to be requested and this will take some time.

02 June 2020 - NW796

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)What (a) is the total number of persons who submitted personal tax returns in each of the past five tax years and (b) was the total amount of tax paid by personal taxpayers in each specified tax year; (2) what (a) is the total number of companies that submitted corporate tax returns in each of the past five tax years and (b) was the total amount of tax paid by corporate entities in each specified tax year; (3) whether he will make a statement on the matter?

Reply:

 

1 (a)

Taxpayer individual

FY_2015

FY_2016

FY_2017

FY_2018

FY_2019

FY_2020

Current_Year_Return

4 827 959

4 721 183

4 704 719

4 832 388

4 896 582

4 174 319

Old_Year_Return

1 308 214

2 055 927

1 788 207

1 642 393

1 892 757

1 208 070

Total

6 136 173

6 777 110

6 492 926

6 474 781

6 789 339

5 382 389

1 (b)

Tax Type

Actual 2014/15

Actual 2015/2016

Actual 2016/2017

Actual 2017/2018

Actual 2018/2019

Actual 2019/2020

Employees Tax

344 508 431 931

376 176 139 489

410 829 910 456

446 274 167 825

477 503 062 436

518 242 315 966

Employees  Tax Refund

-656 619

-11 780 364

-23 020 983

-0

0

0

ETI Credit Granted Against Payment

-2 450 071 285

-3 999 574 019

-4 595 098 741

-4 095 757 274

-3 564 122 029

-4 150 348 513

ETI Credit- Refunds

-1 492 538

-63 648 080

-61 110 359

-220 788 445

-947 993 912

603 878 868

PAYE

342 056 193 490

372 101 137 025

406 150 680 373

441 957 622 106

472 990 964 494

513 488 088 585

Interest on Overdue Tax: Individual

961 608 288

1 177 316 828

1 378 825 754

1 950 291 288

1 745 876 240

1 539 852 562

PIT Admin Penatly Tax

478 382 997

519 475 641

466 141 781

595 809 471

794 257 165

660 084 696

PIT Assessment Tax

8 904 145 338

10 127 476 560

12 252 686 156

15 404 896 170

13 873 604 107

13 508 246 188

PIT Provisional Tax

21 960 745 346

26 101 480 544

28 640 569 890

29 795 850 581

34 934 982 092

31 337 460 943

PIT Refund

-20 475 084 345

-20 747 184 861

-22 964 837 321

-26 801 336 863

-30 510 886 144

-31 363 927 525

PIT

11 837 797 625

17 178 564 713

19 773 386 258

20 945 510 646

20 837 833 461

15 481 716 864

2 (a)

Taxpayer individual

FY_2015

FY_2016

FY_2017

FY_2018

FY_2019

FY_2020

Companies

909 555

886 304

992 857

1 004 116

1 341 419

1 226 619

2 (b)

Tax Type

Actual 2014/15

Actual 2015/2016

Actual 2016/2017

Actual 2017/2018

Actual 2018/2019

Actual 2019/2020

CIT

186 636 020 665

193 385 299 773

207 027 292 710

 

220 238 556 048

214 388 388 377 089

214 984 363 608

CIT Admin Penalty

17 316 924

11 524 956

999 163

559 882

951 197

24 433 686

CIT Assessment Tax

10 447 512 425

10 827 296 647

12 198 961 590

11 804 711 753

12 993 743 440

12 758 800 290

CIT Provisional Tax

184 897 124 092

190 587 195 684

204 761 897 589

218 612 829 088

220 838 532 302

217 443 799 717

CIT Refund

-10 732 346 757

-10 759 398 997

-12 993 896 501

-13 587 950 231

-22 389 301 719

-19 324 507 691

Interest on Overdue Tax: Companies

1 698 766 574

2 233 656 821

2 595 530 097

2 826 509 856

2 342 325 589

3 463 834 423

Royalties

304 647 407

455 024 662

463 800 771

581 895 700

602 126 281

618 003 183

Tax Credits Certificates

-

-

-

-

-

-

VAT

261 419 105 799

281 084 824 365

289 077 227 960

297 997 586 561

324 765 977 900

346 747 694 248

Diesel Refund Off Set

-

1 108 025 243

1 274 885 672

860 141 007

1 223 782 365

2 092 452 806

Domestic VAT

286 840 372 013

296 287 812 461

320 111 119 134

335 419 329 227

377 508 869 004

397 188 847 188

VAT on Imports

136 570 055 698

150 744 532 766

149 265 484 253

152 788 760 372

175 184 585 320

179 987 356 577

VAT Refunds

-161 991 321 912

-167 055 546 105

-181 574 261 099

-191 070 644 045

-299 151 258 789

-232 520 962 323

02 June 2020 - NW852

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What (a) number of applications have been received for the fast-tracking of value-added tax refunds to date in each province, (b) number of the specified applications have been approved in each province and (c) was the Rand value of each approved application in each province?

Reply:

(a)(b)(c) The president announced that SARS will fast track VAT refunds and we have not received any specific requests for such.

SARS has since made amendments in terms of the number of returns that we can expect in a specific cycle to allow vendors qualifying for refunds to submit a return monthly instead of every two months thus enabling a quicker waiting period for refunds.

The turnaround time for refunds compared to same period last year has decreased by 4.4 days.

02 June 2020 - NW851

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the tax measures introduced to combat the effects of the Covid-19 pandemic, what (a) is the envisaged (i) number of beneficiaries who will benefit from the skills development levy holiday and (ii) value of the specified levy holiday in each province and (b) number of employers have already made use of the levy holiday to date in each province?

Reply:

1. (i) An overall average of 137 576 beneficiaries per month. Regional breakdown is illustrated in the table below.

(ii) An average of R 1.44 billion per month or R5.77 billion over the four month period. Regional breakdown is illustrated in the table below.

   

2. The four-month holiday (non- payment) for skills development levy contributions (1 per cent of monthly payroll) made by employers, began on 1 May 2020 and ends on 31 August 2020

May returns (202005) is only due on June 7, 2020 and is therefore not yet available.

02 June 2020 - NW850

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

With reference to the tax measures introduced to combat the effects of the Covid-19 pandemic, what (a) is the envisaged number of beneficiaries who will benefit from the tax subsidy of up to R500 per month for private sector employees earning below R 6 500 per month granted to employers under the Employment Tax Incentive in each province and (b) number of employers have already made use of the specified tax subsidy in each province to date?

Reply:

a) We estimate that 492 386 employees will benefit from the tax subsidy of R500 per month. The table below is breakdown per province.

Province

Total Number

EASTERN CAPE

23 658

FREE STATE

12 063

GAUTENG

260 264

KWA-ZULU NATAL

60 586

LIMPOPO

9 390

MPUMALANGA

17 963

NORTH WEST

10 124

NORTHERN CAPE

4 935

WESTERN CAPE

93 403

Grand Total

492 386

b) 10 223 companies have thus far made use of the wage subsidy for employees earning less than R6 500 per month. The table below is a breakdown of this figure per province.

Province

Grand Total

EASTERN CAPE

548

FREE STATE

360

GAUTENG

4 890

KWA-ZULU NATAL

1 144

LARGE BUSINESS CENTRE

192

LIMPOPO

120

MPUMALANGA

258

NORTH WEST

155

WESTERN CAPE

2 556

Grand Total

10 223

28 May 2020 - NW537

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

Whether any steps will be taken to mitigate the impact of the COVID-19 pandemic on the Republic’s economy; if not, why not; if so, what are the relevant details?

Reply:

Government’s economic response has been conducted according to a 3-phase approach.

Following the declaration of a state of disaster on 15 March 2020, the National Treasury acted immediately to announce a set of Phase 1 economic measures.

These included:

1. Immediate release of funds to where they were needed, including the immediate release of over R460 million in disaster funding to the Health sector.

2. An Instruction Note 8 of 2019/20 applicable to Public Finance Management Act (PFMA) institutions and a Municipal Finance Management Act (MFMA) Circular 100 for municipalities and municipal entities, to speed up the procurement of goods/commodities required to reduce and control the spread of the virus.

3. A first set of exceptional tax measures as part of the fiscal package. These measures were over and above the tax proposals made in the 2020 Budget on 26 February 2020. The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus.

4. The Office of the Auditor General announced a conditional Exemption Notice in order to ensure effective and efficient service delivery and to minimise any potential delay in decision making. The conditional Exemption Notice will also facilitate and enable legislative processes during the period of the national state of disaster.

5 The National Treasury has also approved or supported the release of fund in several areas to provide economic support. These include the early release of social grants in March 2020, the release of funds for SME and spaza shop support, accelerated payment of wage support through the UIF, and seed capital support (R100 million) for the national Solidarity Fund.

In addition, the South African Reserve Bank (SARB) also took critical measures in the weeks following the state of disaster declaration and the lockdown.

These include:

1. A cumulative 200 basis points reduction in the repo rate.

2. A large injection of liquidity in the financial system, including the purchase of government bonds in the secondary market to ensure there is sufficient liquidity in the bond market.

3. Regulatory changes, including a reduction in capital and liquidity requirements.

4. Issuing guidance to reduce dividends and bonuses among banks.

Subsequent to the above, as part of Phase 2, the National Treasury and the SARB have continued to work together on an additional set of interventions. This culminated in the announcement by President Ramaphosa of a large economic intervention package on 21 April 2020, and a more detailed outline by the Minister of Finance on 24 April 2020. The set of additional measures as part of phase 2, are as follows:

1. Spending and revenue measures:

(a) Setting aside an amount of R20 billion to be directed to addressing our efforts in dealing with the pandemic.

(b) Directing R50 billion towards relieving the plight of those who are most desperately affected by the coronavirus. Child support grant beneficiaries will receive an extra R300 in May. From June to October there will be an additional R500 each month. All other grants will be topped-up by R250 per month for six months. We will use our existing system to disburse these grants. In addition, a special Covid-19 Social Relief of Distress grant of R350 a month for the next 6 months will be made available. 

(c) A set of 10 (ten) additional tax proposals:

  1. An increase in the expanded employment tax incentive amount from R500 to R750 per employee. 
  2. A skills development levy holiday of 4 months from 1 May 2020.
  3. Fast-tracking VAT refunds. 
  4. Deferring the payment of excise duty on alcoholic beverages and tobacco products.
  5. A three-month deferral for filing and first payment of carbon tax liabilities to 31 October 2020.
  6. A postponement of some of the corporate tax proposals in the 2020 Budget on interest expenses and assessed losses.
  7. An increase in the deferment of employee’s tax
  8. An increase in the turnover threshold for automatic deferrals.
  9. Increased fiscal backing to individuals who donate to the Solidarity Fund by increasing the deduction available for these specific donations and increasing the limits for payroll giving to the Solidarity Fund – including in determining the monthly withholding of employees’ tax.
  10. Expanding access to living annuity funds by allowing individual to adjust the proportion they receive as annuity income, instead of waiting up to one year until their next contract anniversary date.

2. Additional support to firms through a new R200 billion credit guarantee scheme, jointly backed by the South African Reserve Bank and the National Treasury.

3.

A phased reopening of the economy from 1 May 2020 will begin to reignite economic activity and gradually restore demand and livelihoods.

Beyond the interventions outlined above, the National Treasury is working with partners in government, labor and other stakeholders to move forward with economic reforms, as part of phase 3 of the overall economic intervention.

28 May 2020 - NW71

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

What is the position of the National Treasury on the proposals by the Congress of South African Trade Unions, which are alleged to be supported by the Minister of Public Enterprises, to commandeer R254 billion in funds from the Government Employees Pension Fund for the purposes of writing down Eskom’s debt?

Reply:

Government Employees Pension Fund’s (GEPF) Board of Trustees are fully mandated to make any investment decisions, in relation to the Fund. There is no requirement in terms of the Government Employee Pension Law, for the GEPF to consult with the National Treasury in making investment decisions. GEPF’s investment mandate outlines which type of investments can be made, the percentage allocation for each asset class, benchmarks and performance targets, among other guidelines. The investment decisions made by the GEPF should contribute to positive economic, social and environmental outcomes of South Africa, while earning good returns for members. These investments are regulated by the Financial Sector Conduct Authority, through the Financial Advisory and Intermediary Services (FAIS) Act.

28 May 2020 - NW538

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

Whether, with regard to the COVID-19 pandemic, any financial support or stimulus package will be made available to any affected business or individual; if not, why not; if so, what are the relevant details?

Reply:

Government’s economic response has been conducted according to a 3-phase approach. Following the declaration of a state of disaster on 15 March 2020, the National Treasury acted immediately to announce a set of Phase 1 economic measures.

These included:

1. Immediate release of funds to where they were needed, including the immediate release of over R460 million in disaster funding to the Health sector.

2. An Instruction Note 8 of 2019/20 applicable to Public Finance Management Act (PFMA) institutions and a Municipal Finance Management Act (MFMA) Circular 100 for municipalities and municipal entities, to speed up the procurement of goods / commodities required to reduce and control the spread of the virus.

3. A first set of exceptional tax measures as part of the fiscal package. These measures were over and above the tax proposals made in the 2020 Budget on 26 February 2020. The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus.

4. The Office of the Auditor-General announced a conditional Exemption Notice in order to ensure effective and efficient service delivery and to minimise any potential delay in decision making. The conditional Exemption Notice will also facilitate and enable legislative processes during the period of the national state of disaster.

5. The National Treasury has also approved or supported the release of fund in several areas to provide economic support. These include the early release of social grants in March 2020, the release of funds for SME and spaza shop support, accelerated payment of wage support through the UIF, and seed capital support (R100 million) for the national Solidarity Fund.

In addition, the South African Reserve Bank (SARB) also took critical measures in the weeks following the state of disaster declaration and the lockdown.

These include:

1. A cumulative 200 basis points reduction in the repo rate.

2. A large injection of liquidity in the financial system, including the purchase of government bonds in the secondary market to ensure there is sufficient liquidity in the bond market.

3. Regulatory changes, including a reduction in capital and liquidity requirements.

4. Issuing guidance to reduce dividends and bonuses among banks.

Subsequent to the above, as part of Phase 2, the National Treasury and the SARB have continued to work together on an additional set of interventions. This culminated in the announcement by President Ramaphosa of a large economic intervention package on 21 April 2020, and a more detailed outline by the Minister of Finance on 24 April 2020. The set of additional measures as part of phase 2, are as follows:

1. Spending and revenue measures:

(a) Setting aside an amount of R20 billion to be directed to addressing our efforts in dealing with the pandemic.

(b) Directing R50 billion towards relieving the plight of those who are most desperately affected by the coronavirus. Child support grant beneficiaries will receive an extra R300 in May. From June to October there will be an additional R500 each month. All other grants will be topped-up by R250 per month for six months. We will use our existing system to disburse these grants. In addition, a special Covid-19 Social Relief of Distress grant of R350 a month for the next 6 months will be made available.

(c) A set of 10 (ten) additional tax proposals:

  1. Expanding access to living annuity funds by allowing individual to adjust the proportion they receive as annuity income, instead of waiting up to one year until their next contract anniversary date.
  2. Increased fiscal backing to individuals who donate to the Solidarity Fund by increasing the deduction available for these specific donations and increasing the limits for payroll giving to the Solidarity Fund – including in determining the monthly withholding of employees’ tax.
  3. An increase in the turnover threshold for automatic deferrals.
  4. An increase in the deferment of employee’s tax
  5. A postponement of some of the corporate tax proposals in the 2020 Budget on interest expenses and assessed losses.
  6. A three-month deferral for filing and first payment of carbon tax liabilities to 31 October 2020.
  7. Deferring the payment of excise duty on alcoholic beverages and tobacco products.
  8. Fast-tracking VAT refunds. 
  9. A skills development levy holiday of 4 months from 1 May 2020.
  10. An increase in the expanded employment tax incentive amount from R500 to R750 per employee. 

2. Additional support to firms through a new R200 billion credit guarantee scheme, jointly backed by the South African Reserve Bank and the National Treasury.

3. A phased reopening of the economy from 1 May 2020 will begin to reignite economic activity and gradually restore demand and livelihoods.

Beyond the interventions outlined above, the National Treasury is working with partners in government, labor and other stakeholders to move forward with economic reforms, as part of phase 3 of the overall economic intervention.

19 May 2020 - NW272

Profile picture: Graham, Ms SJ

Graham, Ms SJ to ask the Minister of Finance

What (a) is the comparative increase in rand amount and percentage, year on year, in equitable share provision for (i) Dr Beyers Naudé, (ii) Makana, (iii) Ndlambe, (iv) Sundays River Valley and (v) Blue Crane Route Local Municipalities from 2015-16 to 2019-20 financial years and (b) are the determining factors on which the calculation in increase was made?

Reply:

  1. The tables below show the year on year rand amount increases/decreases and growth rates for the five municipalities.

(b) Factors used to determine allocations to municipalities

Standard determining factors

With respect to the formula allocations, demographic and other data is used to determine each municipality’s portion of the local government equitable share.

  • The proportion of households below the affordability threshold in each municipality is based on 2011 Census data. Using data from the annual General Household Survey, the total number of households in each municipality is then adjusted every year.
  • Bulk water costs are updated based on the average increase in bulk tariffs charged by water boards.
  • Bulk electricity costs are updated based on the bulk price determination approved by the National Energy Regulator of South Africa.
  • All other costs are updated based on the National Treasury’s inflation projections.

A detailed explanation of the above can be found in Annexure W1 of the Division of Revenue Bill, 2019 and more details of how costs are estimated can be found in the ‘discussion paper on the proposed structure of the new local government equitable share formula’ (published in 2013). All of this information available on the National Treasury website. All of the data used in each year’s calculation of the LGES allocations is also published in a summary spreadsheet.

Decline of allocations to Dr Beyers Naudé Local Municipality between 2015/16 and 2017/18

The decline of the allocations to the Dr Beyers Naudé municipality between 2015/16 and 2017/18 is largely a result of the 2016 re-demarcations, which saw the merger of Camdeboo, Baviaans and Ikwezi local municipalities into this municipality. Some elements in the structure of the local government equitable share (LGES) formula and related allocations resulted in allocations to the newly merged municipality being less than the sum of the allocations to the preceding, separate municipalities:

  • The institutional component of the LGES formula includes a fixed base allocation for all municipalities. In 2016/17, this meant the newly formed municipality received a single base allocation of R5.9 million, not 3 (R17.7 million) as they would have as separate municipalities.
  • The subsidisation of the salaries of councilors (calculated outside of the LGES formula) is at a sliding scale, with the highest level of support provided to grade 1 municipalities. As these municipalities were previously grades 3, 2 and 1 respectively, the newly merged municipality, which was graded at level 3, has a smaller number of councilors than the 3 previous municipalities and therefore receives less special support for councilor remuneration and ward committees.

19 May 2020 - NW242

Profile picture: Steyn, Ms A

Steyn, Ms A to ask the Minister of Finance

What will be the tax benefit to persons who donate land in terms of the proposed Draft National Policy for Beneficiary Selection and Land Allocation?

Reply:

The precise nature of the tax benefits available to persons who donate land in terms of the proposed Draft National Policy for Beneficiary Selection and Land Allocation will depend on the final form the policy takes, as well as the implementation of the policy. The benefits that may be available are an exemption from donations tax on donations of land, the disregarding of capital gains and losses on donations of land and a deduction of the lower of the fair market value or cost of the land on the date of donation. The potentially applicable provisions are summarised below.

Section 54 of the Income Tax Act, 1962, (the Act) stipulates that donations tax is payable on the value of any property disposed of under any donation by any resident. Section 56(1), however, provides for the exemption of the payment of donations tax in certain circumstances. For purposes of this reply, the following paragraphs are relevant.

  • Paragraph (h) exempts from donations tax, any donation of property by or to persons listed in sections 10(1)(a), (cA), (cE), cN), (cO), (d) or (e). This includes, among others, the national, provincial or local sphere of government, certain institutions, boards or bodies and qualifying public benefit organisations (PBOs).
  • Paragraph (o) exempts from donations tax, a donation of property consisting of the full ownership in immovable property and meeting the following requirements:
    • the immovable property must be acquired by any beneficiary entitled to any grant or services in terms of the Land Reform Programme, as contemplated in the White Paper on South African Land Policy, 1997, in terms of a project that has been approved by the Minister of Land Affairs or a duly designated person; or
    • the donation of immovable property must have been made under land reform initiatives by virtue of the measures contemplated in Chapter 6 of the National Development Plan: Vision 2030 of 11 November 2011, released by the National Planning Commission, Presidency of the Republic of South Africa.

Paragraph 62(a) of the Eighth Schedule to the Act provides that a person must disregard a capital gain or capital loss determined in respect of the donation or bequest of any asset by that person to the government in the national, provincial or local sphere. Paragraph 64D of the Eighth Schedule provides that a person must disregard any capital gain or capital loss in respect of a donation of land or right to land under a land reform initiative contemplated in Chapter 6 of the National Development Plan: Vision 2030 of 11 November 2011.

A bona fide donation of land made may qualify as an income tax deduction under section 18A of the Act if all the legislated requirements are met and, in particular:

  • if the donation is made to a PBO, the PBO has been approved under sections 18A and 30;
  • if the donation is made to a department of government in the national, provincial or local sphere, the department has been approved under section 18A; and
  • the recipient of the donation actively carries on a listed public benefit activity (PBA) and applies such donations solely for the purposes of the PBA.

Part II of the Ninth Schedule to the Act lists a PBA under the heading “Land and Housing” in paragraph 5(e) that reads as follows.

“The promotion, facilitation and support of access to land and use of land, housing infrastructural development for promoting official land reform programmes.”

This PBA is broader and more multifaceted than the donation of land resulting from an official land reform programme.

12 May 2020 - NW399

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Van Minnen, Ms BM to ask the Minister of Finance

What steps will he take in accordance with section 154(1) of the Constitution of the Republic of South Africa, 1996, to address the financial issues of the Lekwa Teemane Local Municipality (details furnished)?

Reply:

The Provincial Executive Council (EXCO) in the North West Province has resolved to intervene in Lekwa-Teemane by invoking Section 139 of the MFMA to impose a financial recovery plan in the municipality due to persistent material breach of its obligations and failure to provide basics services or to meet its financial commitments. As a result, National Treasury in collaboration with the North-West Provincial Treasury will be assisting the municipality to prepare a financial recovery plan aimed at improving financial management in Lekwa-Teemane. Critical to this process is to also impose appropriate changes to the municipality’s budget and revenue raising measures, budget parameters, set spending limits and revenue targets that will give effect to this recovery plan.

In addition, National Treasury assessed the Lekwa-Teemane’s 2019/20 MTREF budget and it was found to be unfunded and unsustainable. Consequently, National Treasury advised the municipality to revise the budget to ensure that its expenditure is within the realistic revenue to be collected and to develop a financial plan outlining how it will improve its unfunded position to a funded budget. To this effect, the National Treasury will support the Provincial Treasury to closely monitor the implementation of the financial recovery plan and the budget plan of Lekwa-Teemane with the aim of improving the financial management in this municipality.

Capacity building and training programmes conducted by both National and Provincial Treasuries

Following the invocation of section 100 (1)(a) of the Constitution in the North West Province, the directive was issued by the Minister of Finance to improve Supply Chain Management (SCM) in the North West province and National Treasury developed a SCM learnership programme to improve and turn around SCM processes in municipalities. This programme is aimed at rebuilding and renewing trust in municipal services through training of SCM officials. As a result, two SCM practitioners of Lekwa-Teemane LM have been enrolled in this programme. Lekwa-Teemane is also a recipient of the finance management grant, administered by the National Treasury, which is intended to strengthen capacity in the financial management of a municipality. The municipality has appointed four interns in the budget and treasury office (BTO) to support the implementation of the financial management reforms.

The North West Provincial Treasury in partnership with the National Treasury, provided numerous training on financial management reforms and budgeting to municipal officials. Recently, an intensive five-day workshop was conducted to provide further training on budget, financial reporting and revenue management to municipal officials.

12 May 2020 - NW379

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Shivambu, Mr F to ask the Minister of Finance

Whether he intends to introduce legislation that will allow the National Treasury to deduct monies owed to Eskom by (a) municipalities and (b) government departments; if not, why not; if so, what is the envisaged date for introducing the specified legislation?

Reply:

No, the Finance Minister does not intend to introduce legislation of such a nature for the following reasons:

  • The fiscal system has been designed to give autonomy to the spheres of government hence it is a decentralised fiscal system according to the Constitution of South Africa. In our view this system shifts accountability to where it belongs. Through this system, reforms regarding revenue and expenditure functions are transferred from central government. Having said this, the Constitution, Chapter 13, clearly states that nationally raised revenue must be equitably shared between the three spheres of government. Furthermore, it allows for a treasury control mechanism through punitive action against those guilty of transgression of this arrangement. Introducing new legislation contrary to the prescripts and spirit of the Constitution is not acceptable.

In addition, this question betrays a fundamental misunderstanding of the way electricity is paid for in South Africa. Electricity users must pay for the electricity they use. In the case of customers supplied with electricity by municipalities, this means that users (including businesses and households) must pay the municipality for the electricity they use, and the municipality must in turn pay Eskom for the bulk electricity that they have purchased to sell on to their customers. National Government does not make transfers to municipalities to enable them to pay for electricity bought by municipal distribution customers. So it is not clear what source of funding the questioner is suggesting that funds should be deducted from and transferred directly to Eskom.

In line with the autonomy given to municipalities, the Accounting Officers is responsible for exercising prudent financial management at the institution, this is captured in section 60 and 61 of the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) (MFMA). Similarly, Section 38(1)(c) of the PFMA states that the Accounting Officers of departments are responsible for the monies due by the department.

Creating an opportunity that take away the responsibility of the respective sphere of government will open the door for any creditor to approach national government for direct payment which is will be unmanageable especially in cases were disputes may arise as is the case of Eskom and some municipalities as well as municipalities and the Department of Public Works and Infrastructure.

12 May 2020 - NW406

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Van Der Walt, Ms D to ask the Minister of Finance

(1)(a) What is the total budget allocated to each provincial education department for the 2020-21 financial year and (b) will the specified budget allocations be conditional; (2) whether the spending of the allocated budgets will be monitored; if not, why not; if so, what are the further relevant details?

Reply:

(1)(a) Table 1 is displaying the total budget allocated to each provincial education department for the 2020-21 financial year:

(1)(b) Part of the total budget allocated to each provincial education department, includes specific purpose allocations (conditional grants) which must be met. These conditions are stipulated in the annual Division of Revenue Bill/Act.

(2) The reporting requirements specified in sections 32 and 40(4) of the PFMA, and also in the annual Division of Revenue Act (DoRA), requires that expenditure and revenue information for all programmes, including conditional grants, be provided each month to the Provincial Treasuries and the National Treasury for monitoring and evaluation purposes. This information is also used by Parliament and the Provincial Legislatures for monitoring purposes. Failure to provide this information is not only illegal and grounds for the sanctions under the Act to take effect, but also reflects poor management.

12 May 2020 - NW208

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Groenewald, Mr IM to ask the Minister of Finance

What is the (a) total number of staff and (b) remuneration budget of each provincial department, per directorate in each provincial legislature?

Reply:

Below is the personnel information and the 2019/20 Compensation of employees adjusted budget per provincial department. Data has been provided at a departmental level as information per directorate is not readily available and would be best if it is sourced directly from Provincial Treasuries. Further information on personnel numbers and budgets per Programme is provided in the 2019/20 Estimates of Provincial Revenue and Expenditure which can be accessed at the National Treasury website under the following link;

http://www.treasury.gov.za/documents/provincial%20budget/2019/3.%20Estimates%20of%20Prov%20Rev%20and%20Exp/Default.aspx

12 May 2020 - NW398

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Van Minnen, Ms BM to ask the Minister of Finance

What action does he intend to take in accordance with section 154(1) of the Constitution of the Republic of South Africa, 1996, to support and strengthen the capacity of the Madibeng Local Municipality’s financial management in view of the fact that its current liabilities exceed its assets (details furnished)?

Reply:

The Provincial Executive Council (EXCO) in the North West province has resolved to intervene in Madibeng by invoking Section 139 of the MFMA to impose a financial recovery plan in the municipality due to persistent material breach of its obligations and failure to provide basic services or to meet its financial commitments. As a result, National Treasury in collaboration with the North-West Provincial Treasury will be assisting the municipality to prepare a financial recovery plan aimed at improving financial management in Madibeng. Critical to this process is to also impose appropriate changes to the municipality’s budget and revenue raising measures, budget parameters, set spending limits and revenue targets that will give effect to this recovery plan.

In addition, National Treasury assessed the Madibeng’s 2019/20 MTREF budget and it was found to be unfunded and unsustainable. Consequently, National Treasury advised the municipality to revise the budget to ensure that its expenditure is within the realistic revenue to be collected and to develop a financial plan outlining how it will improve its unfunded position to a funded budget. To this effect, National Treasury will support the Provincial Treasury to closely monitor the implementation of the financial recovery plan and the budget plan of Madibeng in order to improve financial management in this municipality.

Capacity building and training programmes conducted by both national and provincial treasuries

Following the invocation of section 100 (1)(a) of the Constitution in the North West Province, a directive was issued by the Minister of Finance to improve Supply Chain Management (SCM) in the North West province and National Treasury developed a SCM learnership programme to improve and turn around SCM processes in municipalities. This programme is aimed at rebuilding and renewing trust in municipal services through training of SCM officials. As a result, five SCM practitioners of Madibeng LM have been enrolled in this programme. Madibeng is also a recipient of the finance management grant, administered by the National Treasury, which is intended to strengthen capacity in the financial management of a municipality. The municipality has appointed eight interns in the Budget and Treasury Office (BTO) to support the implementation of the financial management reforms.

The North West Provincial Treasury in partnership with the National Treasury, provided numerous training on financial management reforms and budgeting to municipal officials. Recently, an intensive five-day workshop was conducted to provide further training on budget, financial reporting and revenue management to municipal officials.

12 May 2020 - NW404

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Bagraim, Mr M to ask the Minister of Finance

(1)Whether any investigation was launched into the conduct of a certain person (details furnished), in relation to the unlawful deposits the specified municipality made with the VBS Mutual Bank; if not, why not; if so, what are the relevant details; (2) whether any disciplinary proceedings were instituted against the specified person; if not, why not; if so, what are the relevant details?

Reply:

1. Yes. The North West Provincial Treasury facilitated an investigation of the Municipality’s investments with VBS by certain person (details furnished). The final report is in possession of the North West Provincial Treasury.

2. The certain person (details furnished) is no longer in the employ of the Municipality. Therefore disciplinary proceedings cannot be instituted against her. A criminal case was open with the Directorate for Priority Crime Investigation (DPCI/Hawks) with the case reference: DPCI HO 6/01/2019.

06 December 2019 - NW582

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Ndlozi, Dr MQ to ask the Minister of Finance

(1)Whether a certain person (name furnished) was requested to conduct a workshop for the Public Investment Corporation (PIC) management; if so, (a) was the specified person paid, (b) what amount was the specified person paid and (c) in what capacity was the specified person invited to conduct the workshop; (2) whether the specified person attended the PIC workshop conducted for the PIC management; if not, why not; if so, what are the relevant details; (3) whether he has found that the inclusion of a certain person (name furnished) presents a conflict of interest, noting the person’s previous responsibilities and proximity to the specified person who conducted the workshop?

Reply:

The Public Investment Corporation did not request a certain person (name furnished) to conduct a workshop for the PIC.

The rest of the question falls away.

06 December 2019 - NW1407

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

With reference to (a) certain items (details furnished) in the period 1 April 2017 up to 31 March 2018 and (b) certain other items (details furnished) in the period 1 April 2018 to 30 September 2018 on the Schedule of Specialised Audit Services’ Investigations and Performance Audits dated 26 October 2018 received from the National Treasury, in each case, what are the details of the (i) purpose of each investigation and audit and (ii)(aa) findings and (bb) recommendations?

Reply:

(i) The details of purpose of investigation or specialised performance audit conducted is reflected as the title of each report, as listed in Annexure A of Parliamentary Question 3072, dated 26 October 2018, as attached.

(ii) (aa) The details of findings are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

(iii) (bb) The details of recommendations are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

03 December 2019 - NW1274

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Shivambu, Mr F to ask the Minister of Finance

(1)Whether a certain person (name furnished) is an employee of a certain company (name furnished); if not, what is the position in this regard; if so, (a) on what date was he employed, (b) was the position advertised and (c) on what date was the post advertised; (2) whether the board of the specified company played any role in the appointment of the specified person; if not, what is the position in this regard; if so, (a) what role did the board play and (b) will he furnish Mr N F Shivambu with the minutes of the board deliberations and decisions?

Reply:

1. The certain person (name furnished) is an employee of a certain company (name furnished) within the Corporate Affairs Department. He was first employed as a Consultant from 01 August 2016 to March 2018. He was appointed as an Investor Relations Specialist on 02 April 2018. The position was advertised internally on the 7th of March 2018.

The certain person (name furnished) was seconded for a period of one year to the Ministry of Public Entities (DPE) to assist with skills development in that Ministry. A formal secondment agreement was entered into between the PIC and DPE. The DPE also reimbursed the certain company (name furnished) for a certain person’s services. The said agreement expired on 31 July 2019.

2. The appointment of employees to positions within the certain company rests with management. The appointment of a certain person was initiated and concluded by the certain company management. The Board of the certain company had no role in the appointment of a certain person (name furnished), first as a Consultant and later to the position of Investor Relations Specialist.

27 November 2019 - NW81

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Gardee, Mr GA to ask the Minister of Finance

Whether, with reference to the reply of the former Minister of Finance to question 1086 on 19 May 2016, he has since learnt of any senior officials in the National Treasury and Finance Ministry that had met with any members of the Gupta family from 1 January 2009 up to the latest specified date for which information is available; if so, in each specified case, (a) what are the names of the persons who were present at each meeting, (b)(i) on what date and (ii) where did each such meeting take place and (c) what was the purpose of each meeting?

Reply:

As replied by the former Minister of Finance to question 1086 on 19 May 2016, the Minister of Finance is not aware of any senior officials in the National Treasury and Finance Ministry having had a meeting with any members of the Gupta family from 1 January 2009 up to the latest specified date for which information is available.

The Minister of Finance is aware, as replied to question 3498 on 16 November 2018, that the current Director-General of National Treasury in his then position as the Chief of Staff: Ministry of Finance provided support capacity to the then Minister of Finance in a meeting requested and attended by Mr. Anil Ambani. At that meeting, was accompanied by one of the Gupta brothers who was then present during the meeting. The meeting details are as follows:

a) Anil Ambani, Pravin Gordhan, Dondo Mogajane and one of the Gupta brothers

b) (i) One Sunday morning around June 2010

(ii) Villa Sterne Tshwane

c) The purpose of the meeting was for Mr. Ambani from the Reliance group of companies in India to meet with the Minister of Finance as he was an international investor and was considering a possible MTN transaction.

25 November 2019 - NW1071

Profile picture: Ndlozi, Dr MQ

Ndlozi, Dr MQ to ask the Minister of Finance

With reference to the statement made by the National Treasury Deputy Director-General, Mr Ismail Momoniat, in a meeting of the Standing Committee on Finance held on 7 September 2019, where he said that the SA Revenue Service needs an intrusive unit to deal with illicit financial flows of money, (a) what are the details of the nature of the unit that he was referring to, (b) on what legislative provisions will the establishment of the unit be based and (c) how will the work of the unit be different from the work done by the intelligence services?

Reply:

I want to refer the Honourable Member to the submission made by the National Treasury in its submission to the Nugent Commission on 29 August 2018, which I fully endorse: “Enforcement powers that are also intrusive are necessary for any tax collection agency. Whilst most taxpayers seek to comply, there are cases of taxpayers who are less cooperative when declaring income or have a clear incentive to withhold key facts about the nature of income-generating activities of the person or business. In such cases it is necessary for SARS to have intrusive enforcement capacity to deal with such evasion.” (“Tax Policy input”, 29 August 2018, pg. 2, Document available on wwww.inqcomm.co.za).

While it is not required of me to infer or elaborate the meaning of Mr. Momoniat’s statement at the Standing Committee on Finance meeting on 17 September 2019, I am informed that Mr. Momoniat was responding in general terms to the Honourable Member’s questions about surveillance capacity of SARS after presenting on progress made on the implementation of the recommendations of the Commission of Inquiry into Tax Administration and Governance by SARS (the Nugent Commission). It is not clear to me why the Honourable Member did not ask Mr Momoniat any further questions for clarification at that meeting. I am in agreement with his view on the general requirement for intrusive capacity for a well-functioning revenue-collection authority. I am sure the Honourable Member will also agree that SARS must have significant intrusive powers, not only to deal with taxpayers concealing information on income received, but also to counter illegitimate trades (and financial flows) in commodities such as tobacco, liquor and counterfeit goods.

Seeing that Mr Momoniat’s response was on the principle, rather than on any specific unit within SARS, questions (a) to (c) do not apply. Indeed, since SARS is a semi-autonomous revenue authority which determines its own internal organization, it is the Commissioner, and not the Minister or any official at National Treasury, who can provide any information on any unit within SARS. I am sure the Honourable Member is also aware that the Nugent Commission’s final report points out that there is “no reason why SARS was, and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits.” (p76 par [9]) Indeed, the Nugent Commission has noted that any such unit is not unlawful. Indeed, SARS must not be a toothless tiger when dealing with tax evasion and illegitimate trades and financial flows.

25 November 2019 - NW1526

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Powell, Ms EL to ask the Minister of Finance

(a) What was the total cost of travel incurred by the National Treasury in bringing officials of the National Treasury to a joint meeting of the Portfolio Committee on Co-operative Governance and Traditional Affairs and the Portfolio Committee on Human Settlements, Water and Sanitation on (i) 29 October 2019 and (ii) 5 November 2019 and (b) what number of officials from the National Treasury were present at each of the specified meetings?

Reply:

a) The travel costs for the National Treasury official who attended the joint Portfolio Committee meetings on (i) 29 October 2019 was R14 536.72 via Pietermaritzburg (the official had a meeting at the Msunduzi Local Municipality on the 28th October and travel arrangements were made for him to catch a flight from Pietermaritzburg to Cape Town) and (ii) 5 November 2019 was R8 224.22.

b) Only one (1) official attended both meetings..

25 November 2019 - NW1408

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Lees, Mr RA to ask the Minister of Finance

With reference to (a) certain items (details furnished) during the period 1 April 2017 up to 31 March 2018 and (b) another certain other item (details furnished) during the period 1 April 2018 to 30 September 2018 on the Schedule of Specialised Audit Services’ Investigations and Performance Audits dated 26 October 2018 received from the National Treasury, in each case, what are the details of the (i) purpose of each investigation and audit and (ii)(aa) findings and (bb) recommendations?

Reply:

i) The details of purpose of investigation or specialised performance audit conducted is reflected as the title of each report, as listed in Annexure A of Parliamentary Question 3072, dated 26 October 2018, as attached.

(ii) (aa) The details of findings are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

iii) (bb) The details of recommendations are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NUMBER: 3072 [NW3436E]

DATE OF PUBLICATION: 26 OCTOBER 2018

OFFICE OF ACCOUNTANT-GENERAL: Specialised Audit Services’ Investigations and performance audits

Reporting Period: 1 April 2017 until 30 September 2018

No

Nature of assignment

Organ of state

Report title

Period completion

(i) Financial Year: 1 April 2017 until 31 March 2018

1.

Forensic Investigation

Richmond Municipality

Supply Chain Management Irregularities

June 2017

2. 

Forensic Investigation

Disobotla Local Municipality

Supply Chain Management Irregularities

June 2017

3.

Forensic Investigation

Department of Women

Supply Chain Management Irregularities

September 2017

4.

Forensic Investigation

National Department of Transport

Supply Chain Management Irregularities

September 2017

5. 

Forensic Investigation

Eastern Cape Department of Human Settlements

Irregularities in Land Acquisition

September 2017

6. 

Forensic Investigation

Eastern Cape Department of Social Development

Supply Chain Management Irregularities

September 2017

7. 

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities – (WTSO Medical Suppliers)

September 2017

8. 

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities – (Dr. Dithebe Medical & Dental Suppliers)

September 2017

 9. 

Forensic Investigation

Mnquma Local Municipality

Municipal Corruption

September 2017

10. 

Forensic Investigation

Moses Kotane Local Municipality

Supply Chain Management Irregularities

September 2017

11.

Forensic Investigation

Independent Police Investigative Directorate

Supply Chain Management Irregularities

December 2017

12.

Forensic Investigation

OR Tambo District Municipality

Fraudulent Payments

December 2017

13.

Forensic Investigation

Bushbuck Ridge Municipality

Fraudulent Payments

December 2017

14.

Forensic Investigation

Department of Arts & Culture

Supply Chain Management Irregularities

December 2017

15.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities

December 2017

16.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities

December 2017

17.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities

December 2017

18.

Specialized Performance Audit

National Treasury

OAG- Operational Plan 2018/19 Phase 1

December 2017

19.

Forensic Investigation

Council for Geoscience

Supply Chain Management Irregularities

December 2017

20.

Forensic Investigation

Limpopo Department of Transport

Supply Chain Management Irregularities

December 2017

21.

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities – Gopolang

December 2017

22.

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities – Adcarden

December 2017

23.

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities – CQW

December 2017

24.

Forensic Investigation

National Treasury

Supply Chain Management Irregularities – RT5

December 2017

25.

Forensic Investigation

City of Matlosana Local Municipality

Supply Chain Management Irregularities

December 2017

26.

Specialized Performance Audit

Bergrivier Local Municipality

Supply Chain Management Irregularities

March 2018

27.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities – mobile classrooms

March 2018

28.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities – mobile classrooms

March 2018

29.

Forensic Investigation

Eastern Cape Office of the Premier

Supply Chain Management Irregularities – school furniture

March 2018

30.

Specialized Performance Audit

National Treasury

OAG Operational Plan

March 2018

31.

Performance Audit

Government Pensions Administration Agency

Supply Chain Management unit Review

March 2018

32.

Specialized Performance Audit

Government Pensions Administration Agency

Supply Chain Management unit establishment

March 2018

33.

Specialized Performance Audit

Government Pensions Administration Agency

Supply Chain Management policies and Procedure Manual

March 2018

34.

Specialized Performance Audit

Government Pensions Administration Agency

Supply Chain Management Process and Procedures

March 2018

35.

Specialized Performance Audit

Government Pensions Administration Agency

Supply Chain Management unit Performance Management

March 2018

36.

Forensic Investigation

Kimberley Mental Hospital

Supply Chain Management Irregularities

March 2018

37.

Forensic Investigation

Eastern Cape Department of Social Development

Financial Mismanagement – ECDC Centers

March 2018

38.

Forensic Investigation

Eastern Cape Department of Social Development

Financial Mismanagement – Co-operatives

March 2018

39.

Forensic Investigation

Northern Cape Department of Health

Supply Chain Management Irregularities - Afrollah

March 2018

40.

Forensic Investigation

Independent Police Investigative Directorate

Supply Chain Management Irregularities

March 2018

41.

Forensic Investigation

Independent Police Investigative Directorate

Supply Chain Management Irregularities – Financial Analysis

March 2018

42.

Forensic Investigation

Department of Trade and Industry

Supply Chain Management Irregularities – Employment Creation Fund

March 2018

43.

Forensic Investigation

Limpopo Department of Cooperative Governance

Supply Chain Management Irregularities

March 2018

44.

Forensic Investigation

Eastern Cape Cooperative Governance

Supply Chain Management Irregularities – Dr Beyers Naude Municipality

March 2018

45.

Forensic Investigation

National Treasury

Supply Chain Management Irregularities –RT50

March 2018

46.

Forensic Investigation

Moses Kotane Local Municipality

Supply Chain Management Irregularities – ICT Continuous Contract

March 2018

         

(II) Financial Year: 1 April 2018- 30 September 2018

1.

Forensic Investigation

Eastern Cape Department of Human Settlements

Fraud & Corruption -

June 2018

2.

Forensic Investigation

National School of Government

Conflict of Interest

June 2018

3.

Forensic Investigation

Department of Women

Supply Chain Management Irregularities – Phase 2

June 2018

4.

Specialized Performance Audit

Department of Trade & Industry

Irregular Administering of Employment Creation Fund

June 2018

5.

Forensic Investigation

Passenger Rail Agency South Africa (PRASA)

PPP Supply Chain Management Irregularities

June 2018

6.

Forensic Investigation

National Treasury – Government Technical Advisory Center (GTAC)

Supply Chain Management Irregularities – Appointment

June 2018

7.

Forensic Investigation

Northern Cape Department of Transport, Safety & Liaison

Irregular Transfer of Grant Funding by RTMC

June 2018

8.

Forensic Investigation

Eastern Cape Department of Social Development

Supply Chain Management Irregularities

June 2018

9.

Forensic Investigation

Department of International Relations and Cooperation (DIRCO)

Review of Forensic Investigation Reports

September 2018

10.

Specialized Performance Audit

Bergrivier Local Municipality

Audit of Completeness of Pre-paid electricity sales – Phase 2

September 2018

11.

Forensic Investigation

National Treasury

Irregular appointment of service providers on the RT25 (mSCOA) by Municipalities.

September 2018

12.

Forensic Investigation

Limpopo Department of Health

Supply Chain Management Irregularities

September 2018

13.

Forensic Investigation

Modimolle Local Municipality

Supply Chain Management Irregularities

September 2018

14.

Forensic Investigation

National Treasury

Supply Chain Management Irregularities

September 2018

15.

Forensic Investigation

North West Department of Rural Environment & Agriculture Development

Supply Chain Management Irregularities

September 2018

16.

Forensic Investigation

Amathole District Municipality

Supply Chain Management Irregularities

September 2018

17.

Forensic Investigation

Nelson Mandela Bay Municipality

Supply Chain Management Irregularities – IPTS (phase 4)

September 2018

25 November 2019 - NW1401

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

In view of his reply to question 934 on 9 October 2019, (a) what then is the justification of retaining the e-tolls project and (b) why is the fact that there is no money owed that is directly ascribable to the Gauteng Freeway Improvement District not supported by abolishing e-tolls?

Reply:

As explained in the reply to question 934, financing the Gauteng Freeway Improvement Project (GFIP) is done on a corporate finance basis and not a project finance basis. Borrowing for toll roads are done on the basis that there is a revenue stream to finance the debt. A significant portion of the South African National Roads Agency’s existing debt was to finance the upgrade of roads on GFIP and it requires a revenue stream to finance it, so e-tolls cannot be abolished without a revenue stream to finance existing commitments.

25 November 2019 - NW1362

Profile picture: Bagraim, Mr M

Bagraim, Mr M to ask the Minister of Finance

Whether the National Treasury did business with certain (a) persons, (b) companies and (c) trusts (names and details attached) (i) in each of the past five financial years and (ii) since 1 April 2019; if so, (aa) on what date(s) did the National Treasury do business with the specified persons, companies and trusts and (bb) what was the (aaa) nature and (bbb) monetary value of each business arrangement?

Reply:

(a)(b)(c)(i)(ii) No

11 November 2019 - NW1165

Profile picture: Bagraim, Mr M

Bagraim, Mr M to ask the Minister of Finance

Whether the National Treasury incurred any costs related to the (a) inauguration of the President of the Republic, Mr M C Ramaphosa, held in Pretoria on 25 May 2019 and (b) State of the Nation Address held in Cape Town on 20 June 2019; if so, in each case, (i) what costs were incurred and (ii) for what reason?

Reply:

(a)(i)&(ii) No costs incurred

(b)(i)&(ii) No costs incurred

11 November 2019 - NW1278

Profile picture: Mente-Nqweniso, Ms NV

Mente-Nqweniso, Ms NV to ask the Minister of Finance

Whether the National Treasury allocated additional funding to the Independent Police Investigative Directorate in order to pay investigators in terms of the SA Police Services Act, Act 68 of 1995; if not, what is the position in this regard; if so, what are the relevant details?

Reply:

Section 23 of the Independent Police Investigative Directorate Act (hereafter referred to as the IPID Act) (2011) provides that the conditions of service, including the salary and allowances payable to an investigator appointed under the IPID Act (2011), must be on par with members appointed as detectives in terms of the South African Police Service Act.

As part of the 2018 Medium Term Expenditure Framework (MTEF) Budget, funds were reprioritised from the South African Police Service (SAPS) to the Independent Police Investigative Directorate (IPID) to provide for various IPID unfunded cost pressures, amongst which was the implementation of section 23 of the IPID Act (2011). At the time of the allocation, the IPID had costed the prospective implementation of section 23 of the Act to amount to R9.3 million over the 2018 MTEF. Subsequent to the allocation of the additional funding, IPID then informed the National Treasury that in terms of the Court ruling, it was also required to implement section 23 retrospectively. This implies that the IPID was required to back-date the salary adjustment for investigators to align with the salaries of Detectives in SAPS, from when the Act was first implemented in 2012. As the budget process had already been concluded, no additional funds were allocated to the IPID.

Upon further engagements with the IPID on this matter, the National Treasury was informed that implementation of section 23 of the IPID Act (2011) did occur in 2018/19 but only as it relates to the prospective adjustment of salaries (notch increments) for investigators. Other salary-related adjustments such as pension liability and back-dated payments were not implemented due to the unavailability of funds.

As part of the 2019 Adjustments Budget, the IPID approached the National Treasury with a request to shift funds within compensation of employees to provide for the back-dated payment of pension liabilities for investigators. The National Treasury supported this proposal on condition that the IPID can accommodate the attendant carry-through costs associated with the revised pension contribution for investigators within its baseline.

11 November 2019 - NW1271

Profile picture: Wessels, Mr W

Wessels, Mr W to ask the Minister of Finance

(1)Whether the National Treasury has conducted a thorough investigation into the accounting practice of provincial departments on classifying payments, in contravention of the National Treasury Classification Circular 21, to implementing agents for the procurement of assets and/or goods and services as transfers and subsidies; if not, why not; if so, (a) what are the details and (b) has any malicious intent in this regard been identified; (2) whether the National Treasury will ensure that all assets procured by provincial departments from implementing agents are reclassified as the relevant class of asset and recorded on the asset register of the relevant department; if not, why not; if so, what (a) progress has been made in this regard and (b) measures have been implemented to ensure that the practice of wrongfully classifying the procurement of assets as transfers and subsidies is prevented; (3) whether he will make a statement on the matter?

Reply:

The aforementioned Classification Circular was developed in consultation with provincial treasuries, specifically the Provincial Accountants-General (PAGs). Once issued the PAGs took responsibility for the implementation thereof in their respective provinces. Any investigation in to the accounting practices as referred to in (1) above would accordingly fall within the remit of each provincial treasury.

Any challenges identified in the implementation and/or audit are however communicated between the PAGs and the National Treasury, represented by the Office of the Accountant-General (OAG), for discussion and resolution. These discussions focus on the substance of the arrangements and the appropriate classification in the accounting and budgeting processes and systems. The legality of arrangements (suspected and/or confirmed) is dealt with by the accounting officer of the provincial department under the oversight of the provincial treasury.

Assets procured from implementing agents are classified and recorded as such in the provincial department’s financial statements. Non-compliance has and will be identified by the AGSA where the accounting office of the department fails to ensure compliance. To this end, there are regular engagements between the National Treasury, OAG, and the AGSA to ensure the accuracy of the audit findings and recommendations. Any correction of material errors such as correcting the non-disclosure of capital assets acquired from implementing agents are identified separately in the notes to the financial statements.

06 November 2019 - NW1255

Profile picture: Sarupen, Mr AN

Sarupen, Mr AN to ask the Minister of Finance

What was the average turnaround time of his department’s services, including immigration and customs, pertaining to the (a) import and (b) export of goods at each port of entry in the Western Cape (i) in each of the past three years and (ii) since 1 January 2019?

Reply:

SARS administers the Customs and Excise Act and does not perform immigration functions at places of entry or exit.

(a)(b)(i)(ii)

Processing times per location are not available as the customs declaration processing system is centralized. Import and export declarations are submitted electronically to customs, processed electronically and released electronically by customs.

The historic data is not readily available and involves an extensive process of data extraction due to the current system design. The average turnaround time consistently over the last several years is less than a minute.

For 2019, the average processing time for electronic import and export declarations on which there is no impediment to the release, i.e. detention for inspection purposes, was 39 seconds. In other words, service providers who submitted electronic declarations to Customs received an electronic release message from customs within 39 seconds of submission, on average.

It is to be noted that more than 70% of all cargo are cleared prior to arrival.

04 November 2019 - NW80

Profile picture: Tshwaku, Mr M

Tshwaku, Mr M to ask the Minister of Finance

(1)What are the current gold reserves of the SA Reserve Bank; (2) whether there are any plans to increase the reserves; if so, what are the relevant details?

Reply:

1. The value of the official gold reserves as at 30 September 2019 was US$5.97 billion (ZAR90,88 billion) (as outlined in the monthly release below), which is approximately 4 million fine ounces. As indicated to the Honourable Member in response to his previous question PQ NW232E (as published on 15 February 2019), the South African Reserve Bank publishes information on our gold reserves every month, which the Honourable Member can access from its website, at

https://www.resbank.co.za/Markets/ForeignReserves/Pages/default.aspx

In particular, for this question, I refer the Honourable Member to the following link on its website:

https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/9541/GoldFXReserves_September2019.pdf

2. The SA Reserve Bank has not made any public announcement on its future plans with regard to the composition of the reserves, but it generally increases reserves depending on timing, particularly when the rand strengthens.

 

04 November 2019 - NW1078

Profile picture: Mkhaliphi, Ms HO

Mkhaliphi, Ms HO to ask the Minister of Finance

Whether the SA Revenue Service (SARS) contracted a certain company (details furnished) in the period 1 January 2008 to 31 December 2014; if so, what (a) goods and/or services was the specified company contracted for, (b) total amount was the company paid and (c) process was followed to appoint the company?

Reply:

(a)(b)(c) A certain company (details furnished) is not reflected on the SARS vendor masterrecord and therefore SARS has no record that this company has ever been contracted, including the period 1 January 2008 to 31 December 2014, by SARS.

04 November 2019 - NW1077

Profile picture: Mkhaliphi, Ms HO

Mkhaliphi, Ms HO to ask the Minister of Finance

Whether the SA Revenue Service (SARS) approached a certain person (name furnished) with a financial offer in April 2014; if so, what (a)(i) was the purpose of the financial offer and (ii) was the amount offered to the specified person and (b) is the name of the SARS official who approached the person?

Reply:

(a)(i)(ii)(b) SARS has no record that a certain person was approached with a financial offer in April 2014 and no amount was ever paid by way of settlement to the person concerned.

04 November 2019 - NW1076

Profile picture: Mkhaliphi, Ms HO

Mkhaliphi, Ms HO to ask the Minister of Finance

Whether the SA Revenue Service (SARS) rented any offices in the Waterfall Park Area, Gauteng, in the period 1 January 2009 to 31 December 2014; if so, (a) what was the purpose of the offices, (b) what amount did SARS pay anually to rent the offices and (c) what number of people were accommodated in the specified offices?

Reply:

(a)(b)(c) According to SARS available records, SARS did not lease any offices in Waterfall Park during the period 1 January 2009 until 31 December 2014.

04 November 2019 - NW1074

Profile picture: Ndlozi, Dr MQ

Ndlozi, Dr MQ to ask the Minister of Finance

(1)Whether any employee of the SA Revenue Service (SARS) was in an in-depth interview with a certain newspaper (name furnished) with regard to its investigation into the illicit tobacco economy between 1 January 2014 and 31 March 2014; if so, on what date was the interview conducted; if not, (2) whether the SARS communication section responded to questions sent to them by the specified newspaper with regard to the illicit tobacco economy; if not, what is the position in this regard; if so, (a) how did SARS respond to the questions and (b) on what date were the questions responded to?

Reply:

1. The current administration has no knowledge that any SARS employee held an in-depth interview with a certain newspaper. SARS employees are prohibited from disclosing any taxpayer information contrary to the provisions of Chapter 6 of the Tax Administration Act, 2011. This is an offence in terms of section 236 of that Act.

2. (a)(b) As at the date of providing this response SARS cannot locate a reply to a media inquiry to a certain newspaper during 1 January 2014 and 31 March 2014. It is however noted that in an article published by a certain newspaper on 20 March 2014 it is reported that “Sars provided amaBhungane with general details of the work it has done to combat non-compliance in the tobacco industry, but did not comment on the specific incidents referred to in this article.”

04 November 2019 - NW1073

Profile picture: Shivambu, Mr F

Shivambu, Mr F to ask the Minister of Finance

Whether the SA Revenue Service (SARS) signed a Memorandum of Understanding (MoU) with the State Security Agency (SSA) whereby the SSA would pay a portion of tax owed on source payments; if not, what is the position in this regard; if so, (a) who from SARS signed the MoU and (b) on what date was it signed?

Reply:

All employers, including the SSA, are required to deduct pay-as-you-earn from remuneration paid to employees in accordance with the Fourth Schedule to the Income Tax Act, 1962; and SARS has issued a Guide which is publicly available to assist employers.

(a)(b) SARS is statutorily unable to disclose details of any arrangement made with or about any person who is a taxpayer.

04 November 2019 - NW1072

Profile picture: Shivambu, Mr F

Shivambu, Mr F to ask the Minister of Finance

With reference to the statement by the Commissioner of the SA Revenue Service (SARS), Mr E Kieswetter, in a meeting of the Standing Committee on Finance held on 17 September 2019, wherein he said that SARS had 4 000 recording devices in offices around the country, what is the total (a) number of recording devices that were imported and (b) monetary value of each device?

Reply:

a) SARS cannot identify listening devices imported into the country by SARS.

b) Not applicable.

04 November 2019 - NW672

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

(1)Whether the National Treasury is actively considering to introduce the prescription of assets in the Republic; if so, (a) why and (b) what are the (i) relevant details and (ii) time frames; (2) whether he has held any consultative meetings with industry bodies and/or organised labour to discuss the introduction of the prescription of assets; if not, what is the position in this regard; if so, what are the relevant details

Reply:

1. No, National Treasury is not actively considering the introduction of prescription of assets. I want to assure all member of any retirement fund that Government’s first and foremost responsibility is to protect their funds at all times, and we have in fact strengthened our regulatory system to continue to do so (e.g. through “Twin Peaks” legislation like the Financial Sector Regulation Act of 2017). In addition, the current regulatory framework in terms of the Pensions Fund Act (PFA) places a fiduciary duty on trustees of funds to always invest prudently and in the best interest of the members. This naturally means investing for the long term, in ways that support economic development and growth, and earning good returns based on fund and market fundamentals. This is good for pension fund members as well as the country. Regulation 28 of the PFA and Guidance Notice 1 of 2019 on Sustainability of Investments and Assets already require pension fund trustees to consider Environmental, Social and Governance (ESG) issues when making investments (refer to Guidance Notice 1 of 2019 on Sustainability of Investments and Assets in the context of retirement funds issued by the Financial Sector Conduct Authority (FSCA) and available on its website www.fsca.co.za).

I would like to caution all who make public comments on retirement funds, including those who report on them, to take greater care that they do not in the process scare retirement fund members to cash out their funds and hence not to preserve their savings. They will become more vulnerable in old age, when they retire and no longer have a decent income or savings.

2. National Treasury has not held any consultative meetings this year with industry or any person on prescribed assets. Guidance is currently given by Government through Regulation 28 and the abovementioned Guidance Notice.

04 November 2019 - NW302

Profile picture: Sarupen, Mr AN

Sarupen, Mr AN to ask the Minister of Finance

(1) What (a) total amount was (i) appropriated and (ii) disbursed from the National Revenue Fund to each state-owned entity (aa) in each of the past 10 financial years and (bb) since 1 April 2019 and (b) are the details of the conditionalities attached to each disbursement in each case in each specified financial year; (2) Whether all conditionalities were met; if not, what are the relevant details in each case; (3) Whether any mechanisms were put in place by the National Treasury to monitor the conditions applied to the disbursements; if not, why not; if so, what are the relevant details; (4) Whether any accountability measures were taken by the National Treasury when conditions were breached; if not, why not; if so, what are the relevant details?

Reply:

1. (a) Below are link summarizing the monies allocated and disbursed to state owned enterprises over the last years. There are two types of payments, the first is the recapitalization funding and the other transfers to public corporations. Transfers are regular payments made to entities by parent departments.

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW302.pdf 

1) (b) With regard to transfers to public corporations- Regular transfers for operations paid by the parent department have no conditions. The recapitalization conditions detail is listed below for each SOE.

Broadband Infraco:

1) (b) No Conditions - Funds were allocated for establishment costs as this was a newly created entity.

  1. No conditions
  2. No conditions
  3. No conditions breached

Denel

  1. (b) Allocated subject to Cabinet approval of Denel's strategy, business plan and funding plan
  2. Corporate plan approved
  3. Monthly meetings continue to be held with the SOC and the Department of Public Enterprises
  4. NA

Development Bank of Southern Africa

  1. (b) There were no specific conditions for the recapitalisation the Development Bank of Southern Africa. It was meant to stabilise their financial position after making loses in the previous years
  2. No conditions
  3. No conditions
  4. No conditions breached

Eskom

2008/09 -2010/11 Subordinated loan (R60 billion)

1) (b) The conditions that were imposed on Eskom mainly related to Eskom achieving certain financial metrics in order to service the debt as well as interest.

2) Due to deterioration of its financial position, Eskom did not meet these conditions. Ultimately, the loan was converted into equity in 2015 as part of the Government support package that was provided to Eskom.

3) Quarterly progress reports and regular engagements between the National Treasury, DPE and Eskom.

4) No conditions were breached. The subordinated loan was later converted to equity in line with a cabinet decision as part of Government Support Package to Eskom.

2015/16 R23 billion equity

1.(b) The conditions as detailed below:

  • 1. Developing a three-year generation strategy;
  • 2. Developing a comprehensive maintenance strategy;
  • 3. Delivering at least R60 billion through cost savings programme in line with the 2015 corporate plan;
  • 4. Submit application to NERSA for tariff adjustments;
  • 5. Raise the borrowing programme additional R52 billion of debt over the planned borrowings in the MYPD3;
  • 6. No new investment to be undertaken in future coal mines;
  • 7. Connect Renewable Energy programme to the National grid;
  • 8. Implement the R250 billion capex together with additional R29 billion for critical transmission and distribution infrastructure;
  • 9. Limit cost overruns in the new build programme;
  • 10. Review of labour costs, employee benefits and salary adjustments;
  • 11. Develop a detail proposal for the disposal of non-core assets;
  • 12 Independent review of operating model and subsidiaries;
  • 13. Ensure all the investigations initiated by the Board are concluded within the contracted timelines and submit findings to National Treasury and DPE;
  • 14. Fill vacant position as a matter of priority; and
  • 15. Provide quarterly reports to National Treasury and DPE
  •  
  • However, initially did not meet the below conditions such as:
  • 1. Detailed study on labour costs;
  • 2. Study on the operating model; and
  • 3. Not providing sufficient information on the quarterly report according to National Treasury requirements.

 

2) Yes all the conditions were subsequently met

3) Quarterly progress reports and regular engagements between the National Treasury, DPE and Eskom.

4) Funds were withheld until ESKOM complied with conditions

2019/20 R23 billion equity

1) (b) No conditions were attached.

  1. No conditions
  2. No conditions
  3. No conditions breached

Land and Agricultural Development Bank of South Africa

  1. (b) There were no specific conditions for the recapitalisation the Land and Agricultural Development Bank of South Africa. It was meant to stabilise their financial position after making loses in the previous years
  2. No conditions
  3. No conditions
  4. No conditions breached

National Housing Finance Cooperation

  1. (b) No conditions were given
  2. No conditions
  3. No conditions
  4. No conditions breached

National Urban Reconstruction and Housing Agency

  1. (b) Use recapitalisation funds to repay loan commitments.
  2. Yes - conditions were met
  3. Quarterly reports - Proof of loan repayment contained in 2016 Annual Report notes to the financial statements
  4. NA

Rural Housing Loan Fund

  1. (b) No conditions were given
  2. No conditions
  3. No conditions
  4. No conditions breached

South African Airways (SAA)

1) (b) Money should be used only for government guaranteed debt, SAA should submit maturity profile of government guaranteed debt together with negotiation plan to manage short-term debt; provide progress reports on progress on initiatives that have been implemented to improve working capital management, provide quarterly financial performance reports

2) Yes

3) Weekly and monthly meetings are being held to monitor financial performance and implementation of measures to improve cash flow

4) Na

South African Express SOC Limited (SAX)

1 (b)

  • 1. Funds will not be utilised to repay any portion of debt owed by South African Express Airways SOC Limited to Transnet;
  • 2. The funds should be utilised only to repay South African Express Airways SOC Limited government guaranteed debt;
  • 3. Upon recapitalisation, South African Express Airways SOC Limited’s government guarantees will be reduced in line with the quantum of recapitalisation;
  • 4. South African Express Airways SOC Limited submits monthly progress reports on the utilization of funds to the Department of Public Enterprises and the National Treasury;
  • 5. By 31 December 2018, Department of Public Enterprises should present a plan for approval by Cabinet of the optimal corporate structure for state owned airlines which should include options that will be pursued for strategic equity partnerships and the disposal of non-core assets; and
  • 6. By 31 December 2018, South African Express Airways SOC Limited and Department of Public Enterprises should submit a comprehensive plan that outlines the airlines strategy to reduce its reliance on Government financial support in the form of guarantees or recapitalisation.

2) The airline used some of the money to pay for leases instead of guaranteed debt as was required

3) Monthly meetings are held

4) A Letter was written to the Department of Public Enterprises and the entity was notified about the irregular expenditure. The Auditor General South Africa was also notified.

South African Post Office

1) (b)

  • R650m Amount was allocated as recapitalisation of SAPO to implement a strategic turnaround plan. The conditions set were as follows: 1. SAPO must not utilize this allocation to fund any past or future salary increases and bonuses. The DTPS must ensure compliance with this condition.
  • 2. The Department must further ensure SAPO continues to submit progress reports on the implementation of its Strategic Turnaround Plan by 20th of every month, clearly providing a breakdown of how the funds have been used. National Treasury should be notified prior to the due date should there be any delays in the submission of the report.
  • R3.7bn
  • 1. SAPO effect payment to the Facility Agent (Nedbank) to defray the R3.7bn loan.
  • 2. SAPO providing a letter to National Treasury from Facility Agent confirming that the R3.7bn facility has been defrayed in full.
  • 3. The guarantee agreement entered into between the lenders and the National Treasury will be terminated upon the receipt of the confirmation letter as set out above.
  • 4. SAPO will be liable to pay any outstanding interest of fees that may arise, after the R3.7bn allocation is affected, ensuring that the R3.7bn facility is fully defrayed.
  • 5. SAPO's R4.17bn guarantee and R4.42bn borrowing limit will be reduced by R3.7bn. The National Treasury will issue a letter to this effect upon the settlement of the R3.7bn facility. All guarantee conditions will remain in full force and effect.
  • 6. SAPO will continue to report to the Monthly Monitoring Task Team on the development and implementation of a revised corporate strategy on a monthly and quarterly basis.
  • R2.9bn
  • 1. SAPO's R470 million guarantee will be folded into this guarantee.
  • 2. The guarantee will lapse after three years or as soon as the loan to be raised is defrayed, whichever comes sooner.
  • 3. The monthly monitoring task team will continue for the duration of the guarantee period.
  • 4. SAPO to provide monthly reports on the company's financial position and progress in developing and implementing a longer term turnaround strategy.
  • 5. SAPO will provide monthly cash flows and projections as well as a breakdown of all outstanding creditor balances and projected creditor balances.
  • 6. Should labour increase (including back pay) exceed the assumption included in the cash requirement calculation submitted for this application, measures will be taken by SAPO to ensure that the overall salary bill remains within the budget identified.
  • 7. The guarantee will be reduced by allocations or recapitalisation that may be made to SAPO.
  • 8. SAPO will be responsible for the drafting of a feasible and implementable corporate strategy framed within the legislative prescripts of its relevant policies. The corporate strategy will be accompanied by operational plans that will assist in monitoring the implementation and progress made by SAPO.
  • 9. SAPO with the assistance of DTPS to implement its 4 phased cost reduction strategy including its revised business model as part of the 2019 corporate strategy.
  • 10. All critical vacancies are to be filled within 5 months of the issuance of this guarantee.
  • 11. SAPO will rebalance its post office network in an effort to eliminate operational and cost inefficiencies.
  • 12. SAPO will not utilise the excess capital within Postbank to fund operations.

2) Yes

3) Monthly meetings, Monthly and quarterly reports

4) None. All conditions relating to the R650m and the R3.7b allocations have been fully met. With regard to the R2.9b allocation, conditions have been met, and the 2019 Corporate Plan submitted by the Post Office addresses the conditions that are related to the revised business model.

South African Postbank

1) (b)

- The Postbank is to provide a comprehensive project plan that sets out specific project implementation, timelines and responsibilities along with associated budgets;

-The Postbank will provide quarterly progress reports on projects and expenditure against the budget.

2. Conditions are partially met in a sense that the corporatisation is still ongoing process due to the long nature of the process that had to be undertaken

3. Monitoring meetings between DoC and Treasury were held on a regular basis where progress was discussed and noted.

4. NA

25 October 2019 - NW89

Profile picture: Msane, Ms TP

Msane, Ms TP to ask the Minister of Finance

Whether the Public Investment Corporation has shares in any of the independent power producer programmes; if so, (a) in which (i) bid window and (ii) project and (b) what is the (i) Rand value and (ii) overall percentage of the specified shares?

Reply:

The information required is contained in the Annexure to this reply.

ANNEXURE

Investment Name

REIPPP Bid Round

Technology

Plant Capacity (MW)

PIC shareholding (%)

Plant Status

PIC investment (R million)

SunEdison Soutpan-Erika

1

Solar PV

28

24%

Sold

R153

SunEdison Witkop-Core

1

Solar PV

30

39%

Sold

R171

SolarCapital de Aar 1

1

Solar PV

94

25%

Held-for-sale

R196

Touwsrivier Solar Park

1

CPV

44

40%

Production

R354

SunEdison Boshoff

2

Solar PV

60

19%

Production

R318

Bokpoort Solar CSP

2

CSP

50

25%

Production

R525

Intikon Jasper

2

Solar PV

75

41.5%

Production

R236

Ilanga CSP1 / Karoeshoek Solar One

3

CSP

100

20%

Production

R557

Xina Solar One

3

CSP

100

20%

Production

R623

Kathu Solar Park

3.5 (CSP bid window)

CSP

100

17.5%

Production

R583

Roggeveld Wind Farm

4

Wind

140

23.25%

Construction

R313

TOTAL

 

 

 

 

 

R4 029

17 October 2019 - NW904

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

With reference to his reply to question 3072 on 22 January 2019, what are the details of the findings and recommendations of each forensic investigation and specialised performance audit listed in the reply?

Reply:

With reference to the list of forensic investigations and specialised performance audits, as listed on ANNEXURE A of Question No. 3072, Below is the response:

i. The details of the findings and recommendations are contained in the detailed reports submitted to the respective department, municipality, entity or law enforcement agent, if requested.

ii. National Treasury is an agent and not the owner of the reports. Therefore, the respective organ of state, as reflected in Annexure A of Question No. 3072 should be responsible for responding to the question posed.

14 October 2019 - NW640

Profile picture: Langa, Mr TM

Langa, Mr TM to ask the Minister of Finance

Whether the National Treasury and/or any entities reporting to him contracted the services of certain companies (details furnished) or any of their affiliated companies; if so, (a) what services did each company render, (b) what was the total monetary value of each contract, (c) what amount was paid to each company, (d) what was the duration of each contract, (e) who signed off on each contract and (f) was each contract in line with the Public Finance Management Act, Act 1 of 1999, and relevant departmental regulations?

Reply:

NATIONAL TREASURY

No

(a) - (f) N/A

ASB

The Accounting Standards Board has not entered into any transactions with of these certain companies or any of their affiliated companies

CBDA

The Co-operative Banks Development Agency (CBDA) did not utelise the services of these certain companies.

DBSA

NO- none appear on the SAP System

(a)(b)(c)(d)(e)(f) N/A

FAIS OMBUD

No contracts were entered into with any of the entities listed in the question.

FIC

The FIC did not contract any services from of these certain companies.

(a) Not applicable

(b) Not applicable

(c) Not applicable

(d) Not applicable

(e) Not applicable

(f) Not applicable

-----------------------------------------------------------------------------------------------------------------

FSCA

The Financial Sector Conduct Authority (and the former Financial Services Board) has never contracted of these certain companies.

GEPF

Government Employees Pension Fund did not contract with the any of of these certain companies.

GPAA

The GPAA have none of the of these certain companies listed on our databases.

IRBA

The IRBA hereby declares that we have not contracted any of of these certain companies.

LAND BANK

Land Bank has never contracted the services of Forensic Data Analysts, Muvoni Technology Group, Muvoni Investment Holdings or Ideco.

Land Bank has contracted the services of companies affiliated to Muvoni Technology group that are part of the same holding company which is under the umbrella of the EOH Group of companies.

These services are as follows:

  1. Bankserv

(a) Licensing for documentation management system

(b) User based license fee

(c) R5 303 326.92 (Excluding VAT) – Last payment made on 30 June 2019

(d) Renewable yearly

(e) Executive Manager: Legal Services & Executive Manager: Corporate Banking

(d) Yes

2. EOH Recruitment Solutions

(a) Recruitment Services

(b) Placement fee based on remuneration package.

(c) R151 200.00 (Excluding VAT) – Last payment made on 9 December 2015

(d) 3 years

(e) Executive Manager: HR & General Manager: HR

(f) Yes

3. Managed Integrity Services

(a) Background screening

(b) Service based fee depending on checks required.

(c) R366 237.27 (Excluding VAT) – Last payment made on 25 July 2019

(d) 3 years

(e) Executive Manager: HR & CFO

(f) Yes

4. Xpert Decision Systems

(a) Due Diligence Searches

(b) Service based fee depending on checks required.

(c) R140.00 (Excluding VAT) – Last payment made on 30 September 2018

(d) 3 years

(e) Head of Internal Audit & CFO

(f) Yes

5. EOH Abantu

(a) Recruitment Service

(b) Placement fee based on remuneration package.

(c) No payments made

(d) 3 years

(e) Executive Manager: HR & General Manager: HR

(f) Yes

Note: The Bank is in the process of determining whether to continue business with the EOH group of companies.

PFA

The Office of the Pension Funds Adjudicator did not contract t of these certain companies.

PIC

The PIC did not contract any of these certain companies. The rest of the question falls away.

SARS

The South African Revenue Service contracted service from one of the certain companies mentioned.

  1. The service rendered relates to biometric services and biometric equipment for vetting purposes.

The total monetary value, amount paid, and duration of each contract are as follow:

Contract Number

  1. Approved amount
  1. PO Spend
  1. Duration of the contract

4500116455

R 226 064.20

R 4 560.00

once-off

4500141177

R 180 000.00

R 178 940.10

once-off

4500147238

R 62 221.20

R 61 081.20

once-off

4500148827

R 11 400.00

R 11 400.00

once-off

4600001513

R 500 000.00

R 61 081.20

2 years

4600001513

 

R 437 574.25

 

4600002084

R 502 345.56

R 315 854.10

1 year

4400000285

 

R 19 710.60

 

4400000285

 

R 114 846.61

 

4400003006

R 498 807.00

R 484 739.15

3 years

4400003548

R 497 070.36

R 4 564.35

3 years

 

R 2 477 908.32

R 1 694 351.56

 
  1. These contracts were approved by the assigned delegated person in line with the Delegation of Authority at the time. Approvals per contract was done as follow:

Contract Number

Approval per DOA

4500116455

Executive Procurement

4500141177

Acting Executive Procurement

4500147238

Executive Procurement

4500148827

Executive Procurement

4600001513

Executive Procurement

4600001513

 

4600002084

Executive Procurement

4400000285

 

4400000285

 

4400003006

Acting Group Executive: Procurement

4400003548

National Bid Adjudication Committee Chairperson Tier 1

   
  1. Yes, each contract was concluded in line with the Public Finance Management Act, Act 1 of 1999, and relevant departmental regulations.

SASRIA

Sasria SOC Ltd has, for the financial years ending 31 March 2018 and 2019 respectively, not contracted of these certain companies.

Whilst we took care and exercised the necessary diligence in preparing the requested information, it is pertinent that we highlight the fact that we completely relied on the stated service providers’ company names as stated above. Therefore, in cases where the service provider’s registered name differs with the trading name, there exists a slight possibility that the service provider may have not been picked up, depending on what may have been recorded on our database at transaction stage.

TAX OMBUD

the Office of the Tax Ombud (OTO) has not of these certain companies.

14 October 2019 - NW616

Profile picture: Komane, Ms RN

Komane, Ms RN to ask the Minister of Finance

What (a) total amount has (i) the National Treasury and (ii) each of the entities reporting to him spent on (aa) cleaning, (bb) security and (cc) gardening services in the (aaa) 2017-18 and (bbb) 2018-19 financial years, (b) amount was paid to each service provider to provide each specified service and (c) total amount was paid to each of the service providers?

Reply:

NATIONAL TREASURY

(i)

(aa)

Cleaning

(bb)

Security

(cc)

Gardening

(aaa)

2017-2018

R6 034 638.21

R 8 514 099.44

0

(bbb)

2018-2019

R6 179 029.93

R 9 417 747.00

0

  1. Total Amount

R12 213 668.14

R17 931 846.44

0

(b)

Cleaning

Security

(c)

Total Amount

Rise Security

 

R 15 155 105.26

R 15 155 105.26

Complete Security

 

R 1 628 077.18

R 1 628 077.18

Pabalelo Security

 

R 1 148 664.00

R 1 148 664.00

Bontle Ke Botho

R9 870 667.61

 

R9 870 667.61

Neso Scope

R2 343 000.53

 

R2 343 000.53

Total Amount

R12 213 668.14

R17 931 846.44

 

ASB

The Accounting Standards Board has two separate service providers, one for cleaning services, and one for security services. We do not have a garden and accordingly, we have not incurred any garden services. The cleaning contract cost R75 543, 88 in 2017/18 and R81 275,40 in 2018/19. The security cost R6 972,63 in 2017/18 and R8 508,63 in 2018/19.

CBDA

The Co-operative Banks Development Agency (CBDA) did not utilize any service provider for cleaning, security and gardening services as the Agency is housed at the National Treasury offices.

DBSA

  1. (aa)(bb)(cc) (aaa) (bbb)

Cleaning (Services have been insourced since – June 2015)

Period

Remuneration (Cost to Bank)

Equipment and Consumables

Total Costs

2017/18

3,180,157

1,138,231

4,318,388

2018/19

3,425,033

1,816,742

5,241,775

Security (Services have been insourced since– July 2016)

Period

Remuneration

(Cost to Bank)

Service Provider

(Maintenance)

Service Provider

(Armed Response)

Equipment and Consumables

Total Costs

2017/18

5,521,486

457,552

36,529

27,983

6,043,550

2018/191)

6,402,059

466,121

22,922

140,495

7,031,597

Note 1: Equipment and consumables includes licence fee for security electronic system.

Landscaping services costs

Period

Service Provider

(Full landscaping services)

Small Enterprise Development company

(Gardening services)

Incubation costs

(Training Service Provider)

Total Costs

2017/18

1,367,000 2)

0.00

0.00

1,367,000

2018/19

332,187 3)

1,127,406 3)

173,971 4)

1,633,564

Notes:

2: In 2017/18 R1,367,000 was paid for Landscaping Services to a contracted services provider.

3: During 2018/19 a fully black owned enterprise development company was created by the DBSA for
gardening services and R1,127,406 was paid to the enterprise development company for the
landscaping services. The R332,187 paid to the contracted services provider was for last contracted
services provided before contract ending.

4: R173,971 paid for incubation programme in training the enterprise development beneficiaries..

b. Amounts paid to each service providers, per specific service provided, included in the tables above.

c. Total amounts paid to each service provider included in the tables above and are the same amounts
paid for specific service.

FAIS OMBUD

The following amounts, where applicable, were expended by the FAIS Ombud on the following services:

(aa) Cleaning Services: 2017/18 – Nil

2018/19 – Nil

(Cleaning services are provided in-house)

(bb) Security Services: 2017/18 – R73,139.42

2018/19 – R106,692.96

Supplier

2018/2019

2017/2018

 

R

R

ADT Security (Pty) Ltd

4 539,79

14 431,46

Cheche Consulting (Pty) Ltd

15 000,00

3 363,00

National Security & Fire (Pty) Ltd

362,52

362,52

Royal Security CC

46 390,65

54 982,44

Securec PVT LTD

400,00

-

Today’s Destiny Trading & Projects

40 000,00

 -

Grand Total

106 692,96

73 139,42

(cc) Gardening Services - 2017/18 – Nil

2018/19 – Nil

(Not applicable to the FAIS Ombud)

FIC

(a)(ii) The FIC incurred the following expenditure during the 2017/18 and 2018/19 financial years:

(aa) Cleaning (aaa) 2017/18 R 1 549 926.81 (bbb) 2018/19 R1 724 438.64

(bb) Security (aaa) 2017/18 R 2 444 465.51 (bbb) 2018/19 R2 608 760.02

(cc) Gardening (aaa) 2017/18 R24 889.40 (bbb) 2018/19 R32 659.98

(b)(c) The FIC paid the following to each service provider for the specified services rendered:

 

 

Amount R'

Cleaning

Security

Gardening

Name of the supplier

Service rendered

2017/2018

2018/2019

Total

2017/2018

2018/2019

2017/2018

2018/2019

2017/2018

2018/2019

Nakisani Hygiene Services

Cleaning Services - Centurion

1 109 707.55

1 210 981.16

2 320 688.71

1 109 707.55

1 210 981.16

 

 

 

 

Bright and Spotless Cleaning Services

Hygiene Services - Centurion

406 673.16

477 721.68

884 394.84

406 673.16

477 721.68

 

 

 

 

Monabo Hygiene Sevices

Cleaning and Hygiene Services – Cape Town

33 546.10

35 735.80

69 281.90

33 546.10

35 735.80

 

 

 

 

     

 

 

 

 

 

 

 

 

Analytical Risk Management

Physical Security Services - Centurion

2 211 495.11

2 367 185.27

4 578 680.38

 

 

2 211 495.11

2 367 185.27

 

 

Mafoko Security Services

Physical Security Services – Cape Town

232 970.40

241 574.75

474 545.15

 

 

232 970.4

241 574.75

 

 

     

 

 

 

 

 

 

 

 

Bidvest Execuflora (Pty) Ltd

Office plant maintenance

24 889.40

19 834.74

44 724.14

 

 

 

 

24 889.4

19 834.74

FSG Landscaping Group (Pty) Ltd

Office plant maintenance

 

12 825.24

12 825.24

 

 

 

 

 

12 825.24

   

4 019 281.72

4 365 858.64

8 385 140.36

1 549 926.81

1 724 438.64

2 444 465.51

2 608 760.02

24 889.40

32 659.98

FSCA

(ii) The Financial Sector Conduct Authority (then the Financial Services Board) has incurred the following expenditure on the services and in the financial years mentioned:

SERVICE

FINANCIAL YEAR

 

(aaa) 2017-18

(bbb) 2018-19

(aa) Cleaning Services

R1 494 718.71

R2 503 412.71

(bb) Security Services

R982 313.25

R1 193 662.23

(cc) Gardening Services

N/A

N/A

(b) amount was paid to each service provider to provide each specified service

SERVICE PROVIDER

SERVICE PROVIDED

FINANCIAL YEAR

   

(aaa) 2017-18

(bbb) 2018-19

Masana Hygiene Services (Pty) Ltd (Reg. No. 2014/110265/07)

(aa) Cleaning Services

R1 494 718.71

R2 503 412.71

Afrisix (Pty) Ltd

(Reg. No. 1998/025088/07)

(bb) Security Services

R982 313.25

N/A

Raite Security and Consulting CC (Reg. No. 2007/043172/23)

(bb) Security Services

N/A

R1 193 662.23

(c) total amount was paid to each of the service providers

TOTAL AMOUNT PAID FOR 2017/18 AND 2018/19 FINANCIAL YEARS

Masana Hygiene Services (Pty) Ltd (Reg. No. 2014/110265/07)

R3 998 131.42

Afrisix (Pty) Ltd (Reg. No. 1998/025088/07)

R982 313.25

Raite Security and Consulting CC (Reg. No. 2007/043172/23)

R1 193 662.23

GEPF

2017 - 2018 financial year

Cleaning

Bower Pty (Ltd) R223 978.50

Security

Broll R 33 665.11

Gardening services

R0

2018 - 2019 financial year

Cleaning

Bower Pty (Ltd) R239 657.79

Security

Broll R 36 358.32

Gardening service

R0

GPAA

IRBA

(a) (ii) (aa) total amount cleaning

(aaa) 2017-18 80 383

(bbb) 2018-19 240 241

(a) (ii) (bb) total amount security

(aaa) 2017-18 13 070

(bbb) 2018-19 9 743

(a) (ii) (cc) total amount gardening services

(aaa) 2017-18 Nil

(bbb) 2018-19 Nil

(b) amount was paid to each service provider to provide each specified service

(ii) (aa) total amount cleaning

(aaa) 2017-18 We Clean It All 80 383

(bbb) 2018-19 We Clean It All 240 241

(ii) (bb) total amount security

(aaa) 2017-18 Fidelity ADT 13 070

(bbb) 2018-19 Fidelity ADT 9 743

(ii) (cc) total amount gardening services

(aaa) 2017-18 Nil

(bbb) 2018-19 Nil

(c) total amount was paid to each of the service providers

(a) 2017-18 We Clean It All 80 383

(b) 2018-19 We Clean It All 240 241

(c) 2017-18 Fidelity ADT 13 070

(d) 2018-19 Fidelity ADT 9 743

LAND BANK

Land Bank has spent the following on the commodities requested:

(aaa) 2017-2018 Financial Year

(aa) Cleaning & Hygiene Services

Services Rendered Land Bank Head Office, 9 Provincial Offices and 15 Satellite Branches

(b) Monabo Hygiene Services

R2 373 113.96 – Total amount paid 2017/2018 Financial year

(c) R2 373 113.96 - Total paid for cleaning and hygiene services for the 2017/18 Financial Year

(bb) Security Services

(b) Fidelity Security Services – R1 692 415.59

Services rendered to Land Bank Head Office, 9 Provincial Offices, 15 Satellite Branches and 6 Properties in Possession

(b) Remez Security - R7 951.50

(b) ADT – R15 591.91

(b) Link Up – R6 036.00

(b) Kloof Alarms – R4 909.00

(b) PMB Security – R19 263.60

(b) Wulfe Security – R5 675.00

(b) Bethal Security – R26 077.67

(b) CSS Security – R4 999.79

(b) Blue Connection t/a Golden Eye – R3 585.80

(b) Salute Security – R4 920.00

(b) BAI Security – R2 508.00

(b) ARS Security – R11 168.00

(b) Ravens Security – R3 895.05

(b) Craddock Security – R2 585.00

(c) R1 811 681.91 - Total paid for security services for the 2017/18 Financial Year

(cc) Gardening Services

(b) Kgatlha Garden Service – R70 104.28

(c) R70 104.28 – Total paid for gardening services for the 2017/18 Financial Year

(bbb) 2018-2019 Financial Year

(aa) Cleaning & Hygiene Services

Services Rendered Land Bank Head Office, 9 Provincial Offices and 15 Satellite Branches

(b) Monabo Hygiene Services

R2 571 172.54 – Total amount paid 2018/2019 Financial year

(c) R2 571 172.54 - Total paid for cleaning and hygiene services for the 2018/19 Financial Year

(bb) Security Services

(b) Fidelity Security Services – R3 158 695.31

Services rendered to Land Bank Head Office, 9 Provincial Offices, 15 Satellite Branches and 6 Properties in Possession

(b) Remez Security – R3 593.75

(b) ADT – R19 479.03

(b) Link Up – R6 380.82

(b) Kloof Alarms – R7 234.99

(b) PMB Security – R5 940.24

(b) Wulfe Security – R6 296.83

(b) Bethal Security – R5 690.00

(b) CSS Security – R4 728.50

(b) Blue Connection t/a Golden Eye – R4 497.45

(b) Salute Security – R4 812.20

(b) BAI Security – R2 692.00

(b) ARS Security – R12 244.00

(b) Ravens Security – R3 997.50

(b) Craddock Security – R9 843.23

(c) R3 256 125.85 - Total paid for security services for the 2017/18 Financial Year

(cc) Gardening Services

(b) Kgatlha Garden Service – R64 458.77

(c) R64 458.77 – Total paid for gardening services for the 2017/18 Financial Year

PFA

The Office of the Pension Funds Adjudicator confirms that the total amount spent for cleaning services was R247 008.34 for 2018/19 and R207 090.49 for 2017/18 financial year. We had three service providers over this period, namely:

  • Bidvest Prestige Group – R0 (2018/19) and R106 903.20 (2017/18)
  • Monabo Hygiene Services – R247 008.34 (2018/19) and R79 645.82 (2017/18)
  • Benedition (Pty) Ltd – R0 (2018/19) and R20 541.47 (2017/18)

The total amount spent for gardening services was R44 477.03 for 2018/19 and R44 433.36 for 2017/18 financial year from ExecuFlora.

PIC

(a)(ii)(aa) The PIC did not spend money on cleaning services as it is provided by the landlord of the building occupied by the PIC.

(a)(ii)(bb) Details regarding security are as follows:

(a)(ii)(cc) The PIC did not spend money on gardening services as it is provided by the landlord of the building occupied by the PIC.

SARS

(a)(ii) SARS has spent the following total amounts on the indicated services:

(aa) Cleaning

(aaa) 2017-18 : R 57 149 143.13

(bbb) 2018-19: R 56 946 298.87

(bb) Security:

(aaa) 2017-18 : R145 006 450.14

(bbb) 2018-19: R141 190 731.16

 

(cc) Gardening Services:

(aaa) 2017/18: R978 899.74

(bbb) 2018-19: R1 216 841.22

(b)(c) The amounts paid to each service provider to provide each specified service and

total amount paid to each service provider in the respective financial years were:

 

2017/18 Financial Year

Cleaning

Supplier Name

Total Amount Paid

Ikhayelihle Cleaning Services

R 6 728 865.90

Masana Hygiene Services

R 4 194 777.57

Servest Cleaning

R 11 616 558.24

Samagaba Cleaning Services pty

R 7 277 573.42

Staza Cleaning Services

R 5 302 914.67

CSG Food Solutions

R 4 669 789.78

Bidvest Prestige

R 4 792 727.28

Kusile Hygiene and Industrial

R 5 386 559.94

Sabuh Trading cc

R 3 104 793.80

Risk Release pty ltd

R 4 074 582.53

Security

Supplier Name

Total Amount Paid

Royal Security Services

R 21 742 018.94

Fidelity Security Services

R 61 141 560.98

Bidvest Protea

R 62 122 870.22

Gardening Services

Supplier Name

Total Amount Paid

4 Seasons Landscaping pty ltd

R 106 819.40

Amaloba Projects

R 265 571.30

Garden Boy Concepts pty ltd

R 130 500.00

Nozihle Cleaning Services

R 64 116.24

Pointing Out Trading (pty) ltd

R 72 000.00

Rothe Plantscapers

R 29 092.80

Shumani Development cc

R 234 000.00

Shumani Development cc

R 76 800.00

2018/19 Financial Year

Security

Supplier Name

Total Amount Paid

Royal Security Services

R 5 910 149.56

Fidelity Security Services

R 94 155 278.20

Bidvest Protea

R 15 408 987.39

Thorburn Security Solutions

R 25 716 316.01

Cleaning

Supplier Name

Total Amount Paid

Ikhayelihle Cleaning Services

R 7 666 045.70

Masana Hygiene Services

R 4 506 730.23

Servest Cleaning

R 9 720 826.30

Samagaba Cleaning Services pty

R 7 393 172.39

Staza Cleaning Services

R 5 528 611.84

CSG Food Solutions

R 4 715 269.24

Bidvest Prestige

R 4 507 725.22

Kusile Hygiene and Industrial

R 5 188 611.07

Sabuh Trading cc

R 3 400 783.11

Risk Release pty ltd

R 4 318 523.77

 

Gardening Services

Supplier Name

Total Amount Paid

4 Seasons Landscaping pty ltd

R 128 183.28

Amaloba Projects

R 144 007.60

Botle Bja Jehova Trading Enterprise

R 69 500.00

Cities Landscaping and Projects

R 156 042.20

Garden Boy Concepts pty ltd

R 130 200.00

Mukelo Projects pty ltd

R 39 420.00

Noels Lawnmower Centre

R 2 976.00

Nono Investment pty ltd

R 115 575.00

Nozihle Cleaning Services

R 70 162.14

Seenathy Trading

R 40 000.00

Shumani Development cc

R 234 000.00

Shumani Development cc

R 76 800.00

Ubuntu Installations pty ltd

R 9 975.00

SASRIA

(aa) Cleaning services

Sasria SOC Ltd (“Sasria”) does not outsource cleaning services. We permanently employ cleaning personnel.

(bb) Security services

Sasria’s security costs for the two years ending 31 March 2018 and 2019 respectively are as follows:

Financial year ending 31 March 2018

Service Provider

Service Rendered

Rand (Excl. VAT)

Growthpoint Properties Ltd

Security

11 795.00

Fidelity Security Services (Pty) Ltd

Security

105 926.56

ARS Advanced Risk Solutions

Security

124 040.00

Financial year ending 31 March 2019

Service Provider

Service Rendered

Rand (Excl. VAT)

Growthpoint Properties Ltd

Security

12 098.90

ARS Advanced Risk Solutions

Security

234 668.00

(cc) Garden services

Sasria does not incur costs on gardening services, as they are provided by the landlord.

TAX OMBUD

The cleaning and security expenses relating to Office of the Tax Ombud (OTO) are paid centrally by South African Revenue Services (SARS). SARS contracted different service providers in different regions, therefore these expenses of the OTO are included in SARS’s costs.

14 October 2019 - NW404

Profile picture: George, Dr DT

George, Dr DT to ask the Minister of Finance

Whether an estimation of the size of the illicit economy has been conducted; if not, why not; if so, (a) what is the estimated size of the illicit economy and (b) what steps are being taken to tax the illicit economy effectively?

Reply:

The elicit economy is a continuously changing landscape and a function of the overall levels of societal and tax compliance.

SARS is in the process of conducting scientific and evidence-based research to quantify the size of the illicit economy for South Africa and as such there is no official position yet on the size of the illicit economy. The study also seeks to identify, quantify illicit/illegal activities taking place in both the formal and informal economy. The study will further involve identifying, locating, understanding, registering, managing and monitoring illicit businesses in their different forms and sizes in the illicit economy.

The illicit economy ranges from the underground economy, which operates outside of the rules and regulations of the country, to organised crime. It involves money, goods or value gained from illegal and generally unethical activity. The activities and/or transactions that occur in the underground economy are illegal for various reasons. Transactions in the underground economy are illegal either because the good or service being traded is illegal or because an otherwise licit transaction does not comply with government reporting requirements. People who work in the underground economy do not declare their incomes. In other words, the tax authorities have no official records of their activities or transactions. These activities generate a wide range of economic, social, environmental or political harms and contribute to the tax gap.

(a) The outcome of the comprehensive research will assist in determining the size of each illegal trading item. In the absence of SARS own research findings, It is difficult

to put a value to the illicit economy. The research studies, which commenced in November 2018, are expected to be completed by March 2020.

(b) In line with the overall SARS strategy of discouraging non-compliance (and incentivizing good behavior) through education and/or enforcement action as executed by its Enforcement divisions, and in recognition of the need for alternative enforcement responses to non-compliance within the illicit economy, SARS established an interim capability to conduct investigations into the illicit economy. The capability executes integrated enforcement investigations and comprises of multi-disciplinary and collaborative investigations and enforcement debt recovery actions, supported by legal experts and data analytics. The tax and customs legislation administered by the Commissioner for SARS (for example, the Tax Administration Act, 2011) governs the conduct of all units within SARS.

14 October 2019 - NW173

Profile picture: Mileham, Mr K

Mileham, Mr K to ask the Minister of Finance

Whether the (a) import and/or (b) production of electric vehicles attract any additional (i) taxes or (ii) tariffs beyond the normal company tax and/or import duties levied by the Government; if not, what is the position in this regard; if so, what is the (aa) purpose of such taxes and/or tariffs and (bb) total amount of taxes and/or tariffs levied in each case?

Reply:

The payment of import or excise duties is based on national policy

determined by the Department of Trade and Industry (the dti), as well as on

international trade instruments to which South Africa is a signatory. Robust

methodologies are followed to ensure that all commodities are classified

correctly, and that the South African Revenue Service collects the correct

amount of revenue due to the state. Accordingly, the payment of import or

excise duties is based on a tariff rate applicable to a specific commodity as

determined by the dti.

(a)(b)(i)(ii) In the case of the import and/or production of electric vehicles, Ordinary

Customs Duties on importation and Ad Valorem Excise duties, payment of

duties based on the customs value of the imported goods, levied by

government are applicable. There are no other additional taxes payable on

electric vehicles. All Vehicles are classified in Chapter 87 of Schedule 1 of

the Customs and Excise Act 91 of 1964. The rates of duty on electric

vehicles range

between 0% and 25%.

It is worth noting that there is no differentiation between the treatment of the conventional fuel combustion and electric vehicles with regards to applicable Customs procedures, the rates and tax-types levied during importation or manufacturing locally, for as long as the vehicles belong to the same categories (that is, whether it’s a bus, truck, ordinary passenger vehicle, etc.).

However, because SARS administer Ad Valorem Excise duties, which considers both weight and value, the mass of the vehicle will invariably impact on the rate of the duty applicable. Thus, smaller cars may attract smaller rates of duty, although the value may be a differentiating factor if such a smaller vehicle is much more expensive. For an example, an electric passenger vehicle and fuel combustion engine passenger vehicle will attract the same rate of duty or excise if the two are of the same mass and value.

11 October 2019 - NW933

Profile picture: Hill-Lewis, Mr GG

Hill-Lewis, Mr GG to ask the Minister of Finance

(a) What number of times has the duty rebate item (i) 406.01 and (ii) 540.01 of the Custom and Excise Tariffs of the SA Revenue Service been used (aa) in each of the past 10 financial years and (bb) since 1 April 2019, (b) what was the total rebate paid and (c) to whom was each rebate paid?

Reply:

(a)(i) Over the past 10 financial years, rebate item 406.01 was used 311 times. The table below depicts data in respect of direct imports and ex-warehouse declarations cleared under rebate item 406.01:

Financial Year

Occurrences

2009/04 - 2010/03

1

2010/04 - 2011/03

0

2011/04 - 2012/03

15

2012/04 - 2013/03

282

2013/04 - 2014/03

4

2014/04 - 2015/03

0

2015/04 - 2016/03

5

2016/04 - 2017/03

0

2017/04 - 2018/03

3

2018/04 - 2019/03

1

Total

311

(aa)

(bb) Since 1 April 2019, rebate item 406.01 has not been used. The table below contains data in respect of direct imports and ex-warehouse declarations declared under rebate item 406.01:

Financial Year

Occurrences

2019/04 - 2019/09/18

0

  1. Over the past 10 financial years, drawback item 540.01 was used four times. The table below contains data in respect of draw-backs processed under item of 540.01:

Financial Year

Occurrences

2009/04 - 2010/03

0

2010/04 - 2011/03

1

2011/04 - 2012/03

1

2012/04 - 2013/03

0

2013/04 - 2014/03

0

2014/04 - 2015/03

1

2015/04 - 2016/03

0

2016/04 - 2017/03

0

2017/04 - 2018/03

1

2018/04 - 2019/03

0

Total

4

(aa)

(bb) Since 1 April 2019, drawback item 540.01 has not been used. The table below contains data in respect of draw-backs processed under item of 540.01:

Financial Year

Occurrences

2019/04 – 2019/09/18

0

(b) The table below contains data in respect of total customs duties rebated under 406.01 and refunded under 540.01

Rebate/Refund Item

Sch 1P1

Sch 1P2B

Total

406.01 (rebate)

R558 624.90

R296 169.00

R854 793.90

540.01 (refund)

R0

R0

R338 273.30

(c) The Rebate item 406.01 relates to the rebate of Customs duties on goods imported for the personal or official use by the State President and his/her family and duty drawback item 540.01 provides for duty drawback (refund) of petrol and distillate fuels. Item 540.01 permits drawbacks for diplomatic and foreign representatives, as well as the State President.

Due to the legislative specifications regarding the restrictions on sharing of client specific information, SARS is not at liberty to disclose the taxpayer specific information.