Questions & Replies: Finance

2013-03-05

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Reply received: November 2013

QUESTION NUMBER PQ 2427
DATE OF PUBLICATION: 20 September 2013
Mr T D Harris (DA) to ask the Minister of Finance:

(1) With regard to the SA Revenue Service annual report tabled on 12 September 2013, the Auditor-General's report on pages 110 and 111 finds that 32% of the management performance measures had not been properly set, measured or implemented, (a) what are the specific details of these required performance measures which had not been set and (b) why have they not been set;

(2) whether performance measures have been set subsequent to the Auditor-General's report; if not, (a) why not and (b) when will they be finalised? NW2912E


REPLY:

(1) (a) The specific details of these measures can be found on pages 68 to 73 of the published 2012/13 SARS Annual Report.

(b) As per the schedule of performance information included in the 2012/13 SARS Annual Report there are 36 outcomes measures in total that SARS seeks to track, measure and report on annually during the course of this strategic planning cycle. 23 outcome measures out of the 36 outcome measures included in the schedule of performance information meet the "smart" criteria/principles as per the Auditor General's findings and therefore there is no requirement for SARS to amend or reset.

The remaining 13 outcome measures are what SARS calls "developmental" measures and thus do not meet the "smart" criteria/principles as reported by the Auditor-General. With respect to these outcome measures, SARS has gone through a measured process of defining what each of these outcome measures seeks to achieve, setting out the measurement criteria for each and the performance indicator required to track progress. SARS set specific qualitative targets (timeframes) for each of these measures to track SARS's progress towards their successful development.

SARS deliberately chose to include these developmental measures in its strategic plans and schedule of performance information firstly because of the desire to be transparent in its journey towards outcomes based performance measurement and reporting and secondly so that SARS does not lose track of its efforts in this regard. Current systems and data limitations prevent these 13 outcome measures from being tracked

meaningfully currently and therefore current and future SARS efforts are on ensuring that accurate baselines and meaningful targets are developed for each measure.

The issue therefore, as SARS understands, is not that these outcome measures have not been properly set, measured or implemented but rather a matter of whether inclusion of these measures by SARS in its strategic plan as part of "the developed strategic measures" (as per the Auditor General report) is appropriate.

SARS undertook to resolve this issue, with the agreement of Auditor General, by agreeing to separate the 13 measures from the rest of the developed measures and disclosing them on a separate page of the strategic plan.

(2)(a)(b) No, it has not been necessary to set adequate performance measures subsequent to the Auditor General's report.

As indicated in SARS's responses to question 1, 23 out of the 36 strategic outcome measures are adequately defined and properly included/disclosed in the strategic plan and reported on in the annual report. These outcome measures meet the "smart" criteria as per the Auditor General's findings.

The remaining 13 outcome measures are what SARS calls "developmental" measures and thus do not meet the "smart" criteria/principles as reported by the Auditor-General. With respect to these outcome measures, SARS has gone through a measured process of defining what each of these outcome measures seeks to achieve, setting out the measurement criteria for each and the performance indicator required to track progress. SARS set specific qualitative targets (timeframes) for each of these measures to track SARS's progress towards their successful development.

SARS anticipates (as disclosed in the strategic plan) introducing these measures into its formal performance management system not later than the 2017/18 financial period.

SARS and the Auditor General agreed that SARS will separate the 13 developmental measures from the developed measures. SARS will seek the approval of the Minister of Finance to make the separation clear in both the strategic plan and annual performance plan. Future plans and annual reports will also reflect this separation.

General comments

SARS seeks to align its performance management and reporting processes with that of SA Government's outcome-based approach to measuring and assessing the performance of government. In this regard, SARS has (at least for the last few years) been constantly reviewing and improving the manner in which it measures and reports its performance.

The development and adoption in the last three years, of SARS's four core strategic outcomes was a key shift towards achieving this ambition.

SARS's journey to improving its overall performance management process over the past few years has also seen a gradual shift away from focusing mainly on how well SARS performs its functions to measuring and reporting how SARS's key outputs and activities are changing behaviours and conditions within and outside of SARS.

This shift has led to the development and tracking of better indicators of performance for both staff and the organisation. In this regard, SARS is gradually shifting away from for example measuring the volume of import/export transactions processed in a period to whether SARS's activities and/or outputs have a positive or negative impact on traders and trade facilitation. SARS is gradually shifting away from for example measuring how many SARS employees were sent for training to how engaged/disengaged employees are.

SARS acknowledges however that the journey towards establishing better and effective links between its key activities and the outcomes it seeks is a complex and long-term endeavour that cannot be instituted overnight. To do this requires accurate data including efficient and effective systems of gathering and analysing data. The SARS modernisation programme has been a key enabler in SARS's journey to seek better performance from its scarce resources in this regard. The modernisation of many of SARS systems, processes and activities enables SARS to perform many of its functions significantly better than in the recent past and facilitates improved performance management by providing accurate and detailed data. This has in turn allowed SARS to focus much of its efforts towards improving performance in other areas that were previously difficult to measure.

Taking the level of complexity and challenges involved in measuring outcomes as opposed to outputs and activities, SARS resolved to adopt a measured approach to how the organisation transitions itself to the desired end state (which is ultimately outcomes based performance measurement and reporting). This approach led to the development of the 36 key strategic measures included on pages 68 to 73 of the 2012/13 SARS Annual Report.

Reply received: November 2013

QUESTION NUMBER: 2391 [NW2874E]
DATE OF PUBLICATION: 20 SEPTEMBER 2013
The Leader of the Opposition (DA) to ask the Minister of Finance:

Has the National Treasury received any documents from the Department of Public Works reporting deviations from tendering procedures for the upgrades to the President's Nkandla residence; if so, what (a) are the details of each of these reports and (b) was the National Treasury's response to each reported deviation?
NW2874E

REPLY:

The National Treasury is not in possession nor has it received any reports from Public Works on deviations from tendering procedures relating to the President's Nkandla residence.

Reply received: November 2013

QUESTION NUMBER: 2384 [NW2867E]
DATE OF PUBLICATION: 20 SEPTEMBER 2013
2384. Mr N L Kwankwa (UDM) to ask the Minister of Finance:

Whether any progress has been made in allowing companies listed on the Johannesburg Securities Exchange (JSE) to set up a holding company in South Africa that will be exempt from all exchange controls; if not, why not; if so, what are the relevant details?

NW2867E
REPLY:

Substantial progress has been made with regard to allowing companies listed on the Johannesburg Stock Exchange to set up a holding company in South Africa. I announced the holding company regime during the 2013 Budget speech. The holding company regime policy is intended to incentivise companies to manage their African and offshore operations from South Africa. Following my announcement, the South African Reserve Bank released a circular on 27 February 2013 calling on all interested and qualifying companies to submit applications for consideration under the new dispensation.

A number of companies have shown interest in the holding company regime but are awaiting finalisation and promulgation of the Taxation Laws Amendment Bill, 2013 (TLAB), which was released on 4 July 2013 for public comments. The TLAB, 2013 will give effect to the complementary tax incentive attached to the holding company regime. The complementary tax incentive to the holding company regime will take effect once the TLAB has been promulgated, with an effective date of 27 February 2013. South African corporates have shown interest in the holding company dispensation and the South African Reserve Bank has received a number of enquiries on the dispensation from potentially interested applicants.

The South African government continues to reform its regulatory policies in order to make South Africa an attractive investment destination and also to support South African companies seeking to expand into Africa and beyond.

Reply received: December 2013

QUESTION NUMBER: 2339 [NW2802E]
DATE OF PUBLICATION: 13 SEPTEMBER 2013
2339. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

Whether the (a) National Treasury and (b) South African Reserve Bank have completed their investigation of the so-called Gaddafi millions; if so, on what date will the report be released?

NW2802E

REPLY:

The last media statement (see attached) issued by the Ministry of Finance indicated that none of the parties who have made allegations that Libyan funds and assets were brought to South Africa under dubious circumstances have come forward with any evidence to back their claims. This situation has not changed.

REPUBLIC OF SOUTH AFRICA

STATEMENT BY MINISTER GORDHAN TO CLARIFY THE ISSUE OF LIBYAN ASSETS AND FUNDS

I have noted ongoing reports by the media on Libyan assets and funds that might be in South Africa. These reports conflate fact and allegations, but present all of them as facts.

The facts of this matter are as follows:

▪ There are Libyan shareholdings in South African entities that were made on a commercial basis. These include the Michelangelo Towers in Sandton, the Centurion Lake Hotel, the Commodore and Portswood Hotels in Cape Town, and the Kruger Park Lodge in Mpumalanga.
▪ Then there have been allegations of Libyan funds and assets that were brought to South Africa under dubious circumstances. None of the people who have made these allegations have produced evidence regarding the transfer of these assets and funds to South Africa. Those who have evidence should hand it over to the relevant Libyan or United Nations authorities.
▪ In May I was approached by a group claiming to represent the Libyan Government and which presented a list of what it claimed was proof of the transfer of Libyan Government funds and assets to South Africa. This list was vague in providing any details that would enable the relevant institutions to trace the whereabouts of these assets.
▪ Subsequently, I met a Libyan Government delegation led by Mr Usama al Abid, the Minister in the Office of the Libyan Prime Minister. We agreed that should any funds and assets be found, we will inform the Libyan Minister and the relevant UN authorities through the Department of International Relations and Cooperation (DIRCO). The Libyan authorities will determine the future of these assets and funds.

Let me reiterate that South Africa will continue to engage with the legitimate Libyan authorities on this matter and in support of our international obligations. All the relevant institutions that report to the Ministry of Finance will cooperate with other government departments and agencies to trace and verify any funds and assets affected by the relevant United Nations processes and that may have found their way to South Africa.

Issued by: Ministry of Finance

Date: 20 June 2013

Reply received: October 2013

QUESTION NUMBER: 2338 [NW2810E]
DATE OF PUBLICATION: 13 SEPTEMBER 2013
2338. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

When does he intend to fill the vacant position of the Commissioner of the SA Revenue Service?

NW2801E
REPLY:

The position of Commissioner of the South African Revenue Service has been advertised. The closing date for applications is the 13th September 2013. All due process will be followed and if a suitable candidate is identified, the position will be filled as soon as possible.

Reply received: November 2013

QUESTION NUMBER: 2328 [NW2782E]
DATE OF PUBLICATION: 13 SEPTEMBER 2013
2328. Mr N Singh (IFP) to ask the Minister of Finance:

Whether any plans are in place to ensure that small businesses are not adversely affected by the carbon tax to be implemented in 2015; if not, why not; if so, what plans?
NW2782E
REPLY:

Small businesses are not expected to be adversely affected by the proposed carbon tax as they are generally not big emitters of pollution.

The primary objective of the proposed carbon tax is to help reduce our green-house-gas emissions in line with our commitments made at Copenhagen in 2009 and as contained in the National Climate Change Response White Paper approved by Cabinet in 2011. The carbon tax is but one of a range of regulatory measures, taxes and tax incentives to help nudge our future growth path towards a low carbon trajectory (a greener and more sustainable economy), taking into account the carbon constrained environment in which all countries will have to operate. The proposed tax will be accompanied, and in some cases preceded, by measures (including tax incentives) to minimize the cost of the transition to a low carbon economy. One of the key measures to assist businesses in general (also small businesses) is the proposed energy efficiency savings tax incentive.

Reply received: November 2013

QUESTION NUMBER: 2203 [NW2621E]
DATE OF PUBLICATION: 23 AUGUST 2013

2203. Mr T W Coetzee (DA) to ask the Minister of Finance:

(1) (a) What was the mandate of Deloitte and Touche in their involvement with the Land Bank's Fit for Future (FFF) programme, (b) on what grounds did the Land Bank motivate for their involvement in the programme and (c) what were the (i) findings and (ii) recommendations of Deloitte and Touche in relation to the FFF programme;

(2) (a) how much did the involvement of Deloitte and Touche cost and (b) what is the breakdown of these costs?
NW2621E

REPLY:

1. (a) Following successful implementation of the "clean-up" and "stabilisation" phases of the turnaround, the Land Bank was ready to commence the third and final phase of its turnaround, the "sustainability" phase. The FFF project was conceived as the primary vehicle through which Land Bank's sustainability goals would be achieved. The objectives of the FFF project is to increase the Bank's development impact; to improve service delivery; to enhance customer interaction; and, to grow the bank based on clear, achievable and sustainable targets. The implementation of the FFF project therefore initially focused on the review of the bank's Business and Operating models and moved into other areas of the business including business and corporate support functions. Deloitte was contracted to partner with the Land Bank through the provision of specialist services in this endeavour.

(b) Following a detailed assessment process, it was determined that completion of the journey would require input from specialist service providers in the areas described in 1(a). Following a procurement process prescribed in the Land Bank's Procurement Policy and in line with the provisions of the PFMA, Deloitte was selected as the preferred service provider. The agreement with Deloitte included a bonus and penalty scheme to ensure that the Bank got value for money and to ensure delivery on the specified service. 1(c)(i) and (ii) below provide an overview of the work carried out and the impact on the operations of the Bank.

(c)(i) The findings were in three broad areas:
1. Strategic coherence – Mandate complexity (Balance between financial sustainability with delivery on development imperatives).
2. Competitiveness – Operating model uncompetitive and expensive; core processes not in place.
3. People and climate – Limited skills base; inadequate accountability in the system.

(c)(ii) Broadly, the recommendations covered the following areas:
▪ Review of the operating model
▪ Business process alignment

▪ Branch network optimisation

▪ Identification of growth areas

▪ Leadership development and training

▪ Executive team integration

These recommendations resulted in the following:
▪ Established a business division focused on emerging farmers (REM)
▪ Optimised Land Bank's delivery channel (AFC implementation)
▪ Implemented core banking process and systems

▪ Stabilised and enhanced the service capacity and capability of the Business and Corporate Banking Division
▪ Optimised branch back office activities through technological means and process efficiency (HUBS)
▪ Optimisation of the Corporate Strategy and Planning Business Unit

▪ Business processes (Credit mandate and models, legal forms and contracts)

▪ Established a high performance, people oriented culture

▪ Leadership alignment.

As a result of the implementation of the above initiatives, the bank has made significant improvements in its processes as follows:
▪ Standardised processes
▪ Increased sales focus
▪ Real-time management reports throughout the application value chain
▪ Improved turnaround times
▪ Customer centricity inculcated.

2. (a) R22 064 856.00
(b) The work was carried out in phases between 2010 and 2011.
Phase 1: The focus was on business and operational model design and implementation.

R 6 656 593.00

Phase 2: The focus was on organisational design and optimisation processes.

R11 178 226.00

Phase 3 was on embedding and evolving of the key initiatives.

R4 230 037.00

Reply received: September 2013

QUESTION NUMBER: 2195 [NW2613E]
DATE OF PUBLICATION: 23 AUGUST 2013
2195. Mr D C Ross (DA) to ask the Minister of Finance:

Whether the protection of jobs and ensuring competition within industries are part of the Government Employees Pension Fund's mandate?
NW2613E
REPLY:

The GEPF is proud to be a leader in Responsible investment worldwide. This is one of its key strategic objectives as set by the board of trustees. This means that as part of its mandate the GEPF, through the Public Investment Corporation (PIC), invests in each invest opportunity based on its merit for economic benefit of its members. Being a leader in responsible investing, GEPF has a team that focuses purely on Environmental, Social and Governance (ESG) components of the investments. This team works closely with the PIC through a joint ESG working committee. The ESG working committee mandate is mainly to ensure active ownership in fulfilment of the requirements of the commitment by both PIC and GEPF to the United Nations supported Principles of Responsible Investing. Therefore each investment is assessed on merit to ensure it provides the required return, in a sustainable manner. As such, this means that jobs are created and sustained and that the businesses in which the Fund invests are competitive enough to be sustainable. Where possible, the developmental impact of investments is tracked over the life of such investments, to ensure that in addition to the required return, there is measureable economic, social and environmental

Reply received: December 2013

QUESTION NUMBER: 2171 [NW2594E]
DATE OF PUBLICATION: 16 AUGUST 2013

2171. Mr L Ramatlakane (COPE) to ask the Minister of Finance:

(1) Whether, with reference to his Budget Speech on 23 February 2012, all the government departments have submitted their annual tender programmes; if not, why not; if so;

(2) How many officials (a) are directors of the companies doing business with the Government and (b) were found to have abused the system;

(3) Whether punitive steps have been taken against those who have defrauded the Government; if not, what is the position in this regard; if so, what are the relevant details?

NW2594E

REPLY:

(1) National Treasury receives procurement plans from National Departments, Constitutional Institutions and Public Entities. The provincial departments submit their procurement plans to their relevant treasuries. For the Financial Year 2013/14 statistics of procurement plans submitted to the National Treasury are as follows:

Sphere of Government	Total Number	Submitted Procurement Plans	Not submitted
National Department	44	44	0
Constitutional Institution	9	9	0
Public Entities	154	89	65

The Office of the Chief Procurement Officer (OCPO) is presently engaging with the public entities that did not comply.

(2) To date, the Database of Restricted Suppliers contains the names of 452 individuals or companies in which officials may have direct interests.

(3) The National Treasury takes action in terms of the Preferential Procurement Policy Framework Act (PPPFA) and the relevant Treasury Regulations by restricting suppliers who have abused the system. This is mainly dependent on action taken by national and provincial accounting officers of departments and public entities as required by the PFMA, PPPFA and Treasury Regulations; and the accounting officers of municipalities in terms of the MFMA. The restriction of 452 persons or companies where government officials have a direct interest in reflects the action taken by relevant accounting officers and the National Treasury.

Reply received: September 2013

QUESTION NUMBER: PQ 2162 [NW2584E]
DATE OF PUBLICATION: 16 AUGUST 2013
MR N J J VAN R KOORNHOF (COPE) TO ASK THE MINISTER OF FINANCE:

(1) Whether the SA Revenue Service (SARS) has a record of (a) VAT fraud, (b) false and dodgy invoicing and (c) business bribing; if not, why not in each case; if so, what (i) is the accumulative effect and cost to the fiscus and (ii) are the further relevant details in each case;

(2) What is the nature of intelligence gathering by his department with regard to (a) the specified incidences, (b) any other related incidences and (c) companies found to be flouting corporate and other laws?
NW2584E
REPLY:

(1) (a) Yes, record is kept on formally identified VAT fraud cases. In instances where cases attract the definition of a "serious tax offence" as determined in the Tax Administration Act, they are referred to SARS' Criminal Investigations who upon conclusion of their investigations hand the cases over to the National Prosecuting Authority for criminal prosecution. From the inception of the Tax Administration Act at the beginning of October 2012 up to 31 March 2013, 7 VAT cases with allegations of violating section 235(1)(a) of the TAAct (Serious Tax offences), were handed over to the SARS Criminal Investigations division. From 1 April to 20 August 2013, a further 31 possible VAT fraud cases were handed over to SARS Criminal Investigations division for investigation.

The fraudulent VAT Registration of vendors where no trace of any form of trading has been identified is one of the main causes of VAT losses to SARS. These registered entities are used to claim fictitious VAT refunds. Since 2009, fraudulent VAT refunds totalling R637, 6 million were released. R393, 3 million of this amount has been secured of which R371, 3 million has already been recovered.

Investigation often results in the identification of syndicates where syndicate members issue invoices to each other to provide a document trail for VAT claims. Elaborate schemes are created involving multiple companies to obtain VAT refunds.

SARS has been successful in dismantling the activities of some of these VAT syndicates by engaging in cooperative relationships with the banks.

(b) All suspicious transactions are, however, followed up. Details of such follow-ups are available.

The manner in which VAT fraud is committed is usually with the submission of fictitious invoices when requested to provide proof of transactions during the submission of VAT returns.

Where SARS becomes aware of such instances it applies the most punitive civil measures allowed for in law – i.e. the taxpayer is assessed and the consequence is that either the refund due is not paid out, or alternatively where paid out is recovered. In addition, maximum penalties as high as 200% and interest can be applied.

(c) Information in this regard is not always available.

(2)(a)&(b) The findings and learning's that come out of these processes are used to enhance the rules in the SARS risk engines in order to curb the type of risk being picked up and reduce the possible losses.

Several tools are being used to detect risk-

▪ In processing returns a risk engine uses a multitude of risk rules and algorithms to compare data from third parties and what had been declared by the taxpayer in order to assign a risk factor to that vendor;

▪ Where a vendor is selected for verification or an in-depth audit, the auditors would use the relevant mechanisms in tax law to obtain information from the taxpayer or third-parties;

▪ Interaction with whistle-blowers, search and seizures as well as tax inquiries as authorised by a judge;

▪ The SARS hotline where taxpayers may call and report suspected non-compliance, as well as a link on its website which enable people to complete what is known as a suspicious activity report;

▪ Foreign law enforcement, tax and customs agencies in terms of various international instruments that exist;

▪ Information from various state institutions, including the SAPS, NPA, AFU, SIU and Hawks;

▪ Participation in multiple governmental formations where information is also provided to SARS i.e. ACCT, JCPS, various sub-groupings under the JCPS etc.;

▪ Engagements with organised labour that provides information periodically at various levels, and

▪ Engagements with various organised representative bodies in business that provides SARS with information periodically.

(2) (c) Please refer to answer above.

Reply received: September 2013

QUESTION NUMBER 2160 [NW2582E]
DATE OF PUBLICATION 16 AUGUST 2013
2160. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

(a) What has he found to be the level of corruption, bribery, VAT fraud and tax evasion in the country since 1 January 2009, (b) what is the scale thereof that was identified in (i) local companies and (ii) international and (iii) foreign companies in this regard, (c) what measures have been put in place to stem this tide and (d) how is the message with regard to these measures being put across?
NW2582E

REPLY:

(a) Level of corruption, bribery, VAT fraud and tax evasion

(i) Corruption and bribery

SARS's mandate is to collect all tax revenue, ensure maximum compliance to all the tax and customs laws that SARS administers and provide a customs service that optimises revenue collection, protects our borders and facilitates legitimate trade. From a statutory point of view SARS does not per se directly investigate bribery and corruption. It is, therefore, difficult for SARS to express an authoritative view on corruption and bribery in South Africa.

It is so that in the course of its daily activities, SARS does come across evidence of corruption and bribery. The Tax Administration Act , 2011, does make provision for a process to be followed to report such cases.

Reported incidents within SARS since 2009, however, are as follows -

2009/10	2010/11	2011/12	2012/13
39	53	60	81

Factors contributing to the detection of corruption reporting within SARS in each year since 2009 include the launch of a modernisation programme, the impact of a revised Tax Administration Act that greatly strengthens SARS enforcement powers, the establishment of a dedicated integrity promotion unit and the enlistment of new technology to enhance efficiency and cross checks in every aspect of the institution.

Within the SARS Anti-Corruption and Security Unit (ACAS), continuous risk assessments are done to identify priority areas/risks. The findings are used to develop action plans in order to address weaknesses as well as to engage and sensitise managers in high risk operational focus areas to fraud and corruption risks.

There is also continuous vetting and screening of personnel to ensure a workforce of integrity.

In addition, continuous training and awareness campaigns on fraud, corruption and general security as well as information security awareness sessions are done with personnel. SARS sites are also provided with a variety of posters on Anti-Corruption and the anti-Corruption Hotline. Anti-corruption is a theme in the SARS Induction Programme conducted monthly, which is compulsory for all new employees.

(ii) Tax evasion (including VAT fraud as one form thereof):

Tax evasion occurs in multiple forms, but can essentially be categorised into three distinct categories.

Non-registration

One category pertains to activities where taxpayers choose not to be visible and known to SARS. (Unregistered taxpayers and traders) Anecdotal information suggests that this practice is most common among local individuals and small and micro businesses.

Aggressive/Impermissible tax avoidance

These types of arrangements border on tax evasion and are often based on the manipulation and abuse of the tax laws involving contrived and artificial schemes.

Outright Tax Evasion and fraud

The third category relates to very pertinent acts of fraud e.g. non-disclosure, under-declaration, fictitious entities committing VAT fraud, interception of refunds by hijacking bank accounts, employers deducting tax and collecting VAT but not paying it over to SARS. Anecdotal information suggests that this practice is more common among local small and medium-sized businesses.

SARS measures non-compliance in respect of a range of categories, tax types and sectors. It is from these analyses that SARS develops its Compliance Programme. Details of measured non-compliance are contained in the Compliance Programme document.

(b) What is the scale thereof?

Worldwide countries encounter difficulties in determining the extent of corruption, bribery and tax evasion (of which VAT fraud is one form). South Africa faces this challenge too. No accurate figures exist that scientifically confirms the levels of these practices in South Africa.

(c) Measures put into place by SARS to address tax evasion:

During the submission of tax returns and customs declarations, a risk engine enabled by SARS new Modernisation Program uses a multitude of risk rules and algorithms to compare data from third parties and what had been declared by the taxpayer in order to assign a risk factor to that vendor.

Where a taxpayer or trader is selected for verification or in-depth audit, the auditors would use the relevant mechanisms in tax law to obtain information from the taxpayer or third-parties.

When a VAT vendor registers with SARS, certain minimum requirements are imposed on the vendor in order to allow SARS to ensure that the vendor does exist. These would include, for instance, physical inspections and visits to the registered address of the vendor before it is registered.

Additional tools utilised to collect information include interaction with whistle-blowers, search and seizures and tax inquiries as authorised by a judge.

SARS has a hotline where taxpayers may call and report suspected non-compliance, as well as a link on its website which enables people to complete what is known as a suspicious activity report which also feed information into the risk engine.

SARS also receives information from foreign law enforcement, tax and customs agencies in terms of various international instruments that exist.

SARS receives information from various state institutions, including the SAPS, NPA, AFU, SIU and Hawks.

SARS also participates in multiple governmental formations where information is also provided to SARS i.e. JCPS, various sub-groupings under the JCPS etc.

Third party information is gathered from various sources such as employees and financial institutions.

SARS engages with organised labour that provides information periodically at various levels i.e. NEDLAC, SACTWU etc.

SARS engages with various organised representative bodies in business that provides SARS with information periodically.

(d) Message with regard to these measures

SARS is building a data-base of fiscal citizenship in which every South African and all businesses operating in South Africa are included in the scope of SARS's view, even if at any particular point in time they are not eligible to pay tax or submit returns. This also includes building a relationship with all South Africans to educate them on the importance of their tax contribution.

The SARS Compliance Programme is an important building block in achieving and maintaining public confidence. It identifies key areas where compliance is not at the levels it should be at and highlights a range of measures to address this over a period of time. The Compliance Programme is one example of how SARS ensures that the measures are clearly defined and communicated to all citizens.

Reply received: December 2013

QUESTION NUMBER 2161 [NW2583E]
DATE OF PUBLICATION: 16 AUGUST 2013
2161. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

(1) Why could the National Treasury not detect the crimes of (a) VAT fraud, (b) false representation of goods and services, (c) Black Economic Empowerment (BEE) fronting and (d) bribes allegedly committed by Andy Bertuli and Jeff Wiggill of First Strut over a period of 20 years;

(2) what link has he found that these alleged crimes have on the operations of Medupi and Kusile Power Stations?
NW2583E
REPLY:

1. National Treasury does not administer the tax legislation but the South African Revenue Service (SARS) does and all matters related to its application are within SARS purview.

a. The allegation of VAT fraud that the Honourable Mr Koornhof is referring to appears to have been as a result of reportage in certain newspaper about the mentioned taxpayers.

SARS has not laid a compliant of VAT fraud against the taxpayers with the National Prosecuting Authority. Our enquiries into their affairs have not revealed any evidence that would lead to an investigation of VAT fraud at this stage. In the event that SARS receives such evidence, SARS will inquire into the matter. SARS would welcome information in this regard.

However, SARS established that the activities of the taxpayers concerned are now subject of an inquiry, based on the relevant legislation by the Financial Services Board.
SARS shares Mr Koornhof's concern about the type of schemes that is reported to have been carried out by First Strut. These arrangements simulate collective investment schemes; offer high returns to the initial depositors and collapse when large amounts are withdrawn simultaneously

for any reason. Usually, this is when the deposits dry up and cannot sustain the pay-outs. It is often the case that these schemes, like all forms of white-collar crime, also involve a degree of tax evasion or fraud.

However, it needs be noted that the success of these schemes depends on several factors including the credulity of the potential depositors; endorsement from financial institutions; lack of due diligence by the depositing institutions and individuals. Since they trade privately with deliberate obfuscation of their true nature, they are usual come to notice only when they become large in scale and or when they collapse. Typically, it is only when the schemes collapse that defrauded investors report any wrongdoing to the authorities in an effort to recoup losses.

Dealing with these schemes, necessarily, involves a wide range of state institutions. SARS is but one of them. Others may include the South African Police Service (SAPS); the National Prosecuting Authority (NPA); the Financial Intelligence Centre (FIC); the South African Reserve Bank (SARB) and the Financial Services Board (FSB).

b. The allegation of "false representation of goods and services" may be understood under different contexts.

It may be related to the aforementioned VAT fraud. SARS has not laid a compliant of VAT fraud against the taxpayers with the National Prosecuting Authority. Our enquiries into their affairs have not revealed any evidence that would lead to an investigation of VAT fraud at this stage. In the event that SARS receives such evidence, SARS will inquire into the matter. SARS would welcome information in this regard.

Or, it may relate to a department's procurement of goods which would be a violation of the Public Finance Management Act. In that case, SARS would not be in a position to reply since SARS did not procure any goods and services from the above-mentioned entities.

c. SARS is in no position to reply to matters relating to "Black Economic Empowerment (BEE) fronting" because they are not within our legal remit and SARS did not procure any goods and services from the above-mentioned entities.

d. SARS is in no position to reply to matters relating to "bribes allegedly committed by Andy Bertuli and Jeff Wiggill of First Strut over a period of 20 years" because they do not concern any SARS official.

2. SARS is not in a position to reply to matters relating to "what link has he found that these alleged crimes have on the operations of Medupi and Kusile Power Stations" because they are not within our legal remit.

Reply received: December 2013

QUESTION NUMBER: 2119 [NW2541E]
DATE OF PUBLICATION: 16 AUGUST 2013
2119. Mr M Swart (DA) to ask the Minister of Finance:

(1) Whether any staff member in the National Treasury (a) performed work in addition to the responsibilities related to his or her work, outside normal working hours, in the (i) 2008-09, (ii) 2009-10, (iii) 2010-11, (iv) 2011-12 and (v) 2012-13 financial years and (b) has been performing such work during the period 1 April 2013 up to the latest specified date for which information is available; if not, how is it determined whether such work is being performed or not; if so, in each case, (aa) how many staff members and (bb) in what job or work categories are the specified staff members employed;

(2) whether approval for such work was obtained in each case; if not, what are the relevant details; if so, (a) what is the policy of the National Treasury in this regard, (b) by whom are such applications considered and approved, (c) how many contraventions of this policy were brought to the attention of the National Treasury in the (i) 2010-11, (ii) 2011-12 and (iii) 2012-13 financial years and (d) what steps have been taken against transgressors?
NW2541E

REPLY:

National Treasury (NT) employees are requested to obtain approval from the Accounting Officer before they conduct work in addition to their NT work. Should employees not comply with this request, NT will be made aware by the Auditor General of South Africa (AGSA) during the annual audits.

(1) (a) Yes

(1)	Period	(aa) Number of staff members	(bb) Job / Work categories	(2)
(i)	1 April 2008 to 31 March 2009	0	Not Applicable (NA)	NA
(ii)	1 April 2009 to 31 March 2010	4	▪ Economic Policy ▪ Tax Policy ▪ Security	Yes – 2
(iii)	1 April 2010 to 31 March 2011	5	▪ Economic Policy ▪ Tax Policy ▪ Security	Yes - 2
(iv)	1 April 2011 to 31 March 2012	9	▪ Accounting ▪ Strategy & Risk Management ▪ Security ▪ Economic Policy ▪ Tax Policy	Yes - 7
(v)	1 April 2012 to 31 March 2013	10	▪ Information & Communications Technology ▪ Security ▪ Economic Policy ▪ Risk Management ▪ Accounting ▪ Communications	Yes - 10

(1) (b) None, SMS employees declare their financial interest during April of each year, for the previous financial year. That includes remunerated work outside the public service.

(2) Yes, employees obtained approval; refer to column (2) in the table above. In previous years approvals were returned directly to employees. Missing approvals are as a result of resignation. Filing of approvals is now centralized as demonstrated by the 2012/13 information.

(a) The National Treasury applies Section 30 and 31 of the Public Service Act.

(b) Applications are considered and approved by the Executing Authority or his delegated authority.

(2)	Period	(c) Number of contraventions brought to NT's attention	(d) Steps taken against transgressors
(i)	1 April 2010 to 31 March 2011	Nil	NA
(ii)	1 April 2011 to 31 March 2012	5	Written & verbal warnings issued. Ex post facto approvals after raising awareness.
(iii)	1 April 2012 to 31 March 2013	Nil	NA

Reply received: September 2013

QUESTION NUMBER: 2086 [NW2508E]
DATE OF PUBLICATION: 16 AUGUST 2013

2086. Mr M W Rabotapi (DA) to ask the Minister of Finance:

(a) Does the National Treasury prepare quarterly interim financial statements and (b) are these statements considered by the Audit Committee?

NW2508E
REPLY:

(a) Yes

(b) Yes

Reply received: December 2013

QUESTION NUMBER: 2077 [NW 2499E]
DATE OF PUBLICATION: SEPTEMBER 2013

NW2499E
Mr D C Ross (DA) to ask the Minister of Finance:

(a) How much money has the Public Investment Corporation (PIC) invested in AfriSam to date?
(b) What is the status of AfriSam's debt restructuring?
(c) Who is responsible for the restructuring?
(d) What percentage of AfriSam shares does the PIC currently hold? NW2499E

REPLY:

(a) The Public Investment Corporation normally does not publicly disclose details on unlisted investments made on behalf of its clients. However, as disclosed in the GEPF Annual Financial Statements for 2012 a total of R11.66 billion was invested in Afrisam. Since then no further money has been invested, however, significant capital has been repaid to GEPF

(b) The AfriSam debt restructuring was finalised during the GEPF financial year ended 31 March 2013.

(c) The restructuring was driven by a PIC Restructuring Task Team, on behalf of GEPF, in conjunction with AfriSam management and other AfriSam stakeholders which include shareholders, debt providers and consultants.

(d)The GEPF's current stakeholding in Afrisam is 65.99%.

Reply received:October 2013

QUESTION NUMBER: 2076 [NW2498E]
DATE OF PUBLICATION: 16 AUGUST 2013
2076. Mr D C Ross (DA) to ask the Minister of Finance:

(a) What is the latest valuation of the contingency reserves of the Government Employees Pension Fund (GEPF), (b) how does this compare to the desired valuation, (c) what is being done to reach the desired valuation and (d) what time frame has he set to reach the desired valuation?
NW2498E

REPLY:

Question (a) and (b): In its most recent valuation, the GEPF's actuaries indicate that the GEPF is 100 per cent funded. The value of assets held as at 31 March 2012 amounted to R1 039 billion, compared with R801 billion on 31 March 2010. The estimated value of accrued liabilities, as at 31 March 2012, amounted to R1 012 billion, comprising a contributing member liability of R774 billion, a pensioner liability of R223 billion and a data and past discriminatory practice reserve of R15 billion. The actuaries indicate, however, that the fund's assets are not sufficient to cover the recommended "contingency" reserves in full. These are reserves which would allow for lower than projected future returns on investments, higher life expectancy, higher salary increases and higher adjustments for consumer inflation in pension values, amongst other economic and demographic uncertainties. The recommended contingency reserves amount to R464 billion, against which the fund has a R27 billion excess of assets over the accrued liability. Details are set out in the GEPF's annual report which will be tabled in Parliament.

Question (c):

The GEPF's investment policy is aimed at ensuring that the fund will be able to meet its liabilities over the long term. Taking into account the uncertainties associated with long-term funding commitments of this nature, it is not realistic to expect actuarial reserves to be fully funded at all times. However, the funding of the GEPF contingency reserves is expected to improve over the period ahead for the following reasons, amongst others:
- Increases in long-term bond yields,
- Moderation in remuneration trends reflected in the three-year wage agreement for the public service, and
- Favourable returns on equity investments since 2012.

Question (d): The Fund's liabilities are long term and ongoing in nature, and its actuarial position is subject to unavoidable uncertainty in economic, demographic and other trends. A specific time-frame for meeting long-term reserve levels is therefore unlikely to be realistic. In keeping with the GEP Law and the Rules of the Fund, however, both the Board of Trustees and the Minister of Finance are advised by the Fund's actuaries on its funding position and changes to benefits or contribution rates that may be required.

Reply received: December 2013

QUESTION NUMBER: 2075 [NW2497E]
DATE OF PUBLICATION: 16 AUGUST 2013

2075. Mr D C Ross (DA) to ask the Minister of Finance:

(1) What (a) is the breakdown of the different investments in the Isibaya portfolio of the Government Employees Pension Fund (GEPF) and (b) were their respective performances (i) in the (aa) 2010-11, (bb) 2011-12 and (cc) 2012-13 financial years and (ii) since 1 April 2013;

(2) (a) what was the projected return on investment for the Isibaya portfolio when the portfolio was created and (b) what was the most recent projected return on investment?

NW2497E
REPLY:

1 (a) The Isibaya Portfolio is divided (broken down) into two broad categories:

1. Development Investments
2. Private Equity Investments

The objective of the Developmental Investment portfolio is to earn good financial returns whilst also supporting positive, long-term, economic, social and environmental outcomes. The developmental investments focus on the in the following broad developmental sectors as defined in the GEPF Developmental policy:

▪ Economic Infrastructure investments
▪ Environmental Sustainability investments
▪ Social Infrastructure investments
▪ Priority sectors

The Private Equity portfolio seeks to invest in equity or equity related investments focusing on all classes of private equity, namely: venture, small, medium and large capital companies requiring capital for buy in/out, replacement capital or expansionary capital.

1 (b) (i) (aa) Performance Information 2011
The Isibaya Fund returned 13.23% for the 12 months period ending 31 March 2011.

(bb) Performance Information 2012
The Isibaya Fund returned 6.74% for the 12 months period ending 31 March 2012.

(cc) Performance Information 2013
The Isibaya Fund returned 11.15% for the 12 months period ending 31 March 2013.

1 (b) (ii) The Isibaya Fund returned 1.06%% for the 4 months period from 01 April 2013, ending 31 July 2013.

2 (a) When the Isibaya portfolio was initially created, the expected overall return for the portfolio was the South Africa 10 year Government Bond rate.

2 (b) Since the start of the private placement memoranda (PPM's) within each investment pillar in 2013, five (5) PPM's have been approved with their own return expectations as follows:

i. Environmental Sustainability Fund I - South Africa 10 year Government Bond rate plus 700 basis points;

ii. Priority Sectors Investment Fund I - South Africa 10 year Government Bond rate plus 300 basis points;

iii. South African Private Equity Fund I - South Africa 10 year Government Bond rate plus 600 basis points;

iv. Economic Infrastructure Fund I - South Africa 10 year Government Bond rate plus 300 basis points

v. Rest of Africa Private Equity Fund I – US SA 10 year Government Bond rate plus 600 basis points.

Reply received: August 2013

QUESTION NUMBER: 1968 [NW2320E]
DATE OF PUBLICATION: 2 AUGUST 2013
1968. Mr T Botha (Cope) to ask the Minister of Finance:

Whether the National Treasury intends to (a) increase and (b) ring-fence funds for infrastructure spending to (i) achieve the National Development Plan (NDP) targets and (ii) combat corruption; if not, why not; if so, what are the relevant details?
NW2320E
REPLY:
a) One of the Government's key priorities is to channel funds towards infrastructure investment. This is in accordance with the National Development Plan (NDP) which points out that for the economy to grow faster and in a more inclusive manner, the country needs a higher level of spending. The medium-term strategic and expenditure plans of government will be aligned over time to realise the objectives of the NDP.

A total of R827 billion is currently budgeted for identifiable infrastructure projects and programmes over the next three years. The 2014 medium-term expenditure framework budgeting process currently underway includes the intention to increase funding towards infrastructure projects. This process is subject to institutions demonstrating their ability to successfully implement additional capital projects, the ability of the fiscal framework to make funds available for infrastructure projects, and the extent to which funds can be reprioritised from consumption to capital.

b) As for all funding appropriated for government votes, investment funding is subject to many requirements. Through Appropriation Acts, funding is subject to the provisions of the Acts themselves, which state amongst others that funds need to be spent in accordance with the purposes specified and are subject to any conditions determined by the Minister of Finance. Division of Revenue Acts set out conditions for the spending of conditional grants allocated to provinces and municipalities. Spending is always subject to the Public Finance Management Act, 1999 (Act 1 No 1 of 1999), through which the accounting officer of a department, trading entity or constitutional institution is charged with the responsibility to ensure the effective, efficient, economical and transparent use of resources at all times. The fight against corruption, and those involved in these practices, will be unrelenting and everything will be done to minimise opportunities for corruption.

Reply received: August 2013

QUESTION NUMBER: 1958 [NW2310E]
DATE OF PUBLICATION: 2 AUGUST 2013
1958. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

Whether the National Treasury intends to offer a rescue package to the SA National Roads Agency Ltd (Sanral) to protect the integrity of Sanral's investing potential in view of the prolonged implementation of the e-tolling project?

NW2310E
REPLY:
Government has provided financial guarantees to SANRAL amounting to R31.91 billion of which SANRAL has utilised R21.6 billion for the construction of Gauteng Freeway Improvement Project (GIFP). The guarantee framework agreement allows Government to assume the rights and obligations of SANRAL as debtor.

Reply received: August 2013

QUESTION NUMBER: 1957 [NW2309E]
DATE OF PUBLICATION: 2 AUGUST 2013
1957. Mrs J D Kilian (Cope) to ask the Minister of Finance:

(1) (a) What amounts in revenue from licence fee payments has Independent Communications Authority of South Africa (Icasa) paid into the National Revenue Fund in terms of section 15 of the Independent Communications Authority of SA Act, Act 13 of 2000, (i) in the 2012-13 financial year and (ii) during the period 1 April to 30 June 2013 and (b) how do the payments compare with licence revenue payments in the (i) 2009-10, (ii) 2010-11 and (iii) 2011-12 financial years;

(2) whether the National Treasury has established a monitoring mechanism to ensure that all licence fees are duly collected by ICASA and transferred into the National Revenue Fund within 30 days of receipt thereof; if not, why not; if so, what are the relevant details;

(3) whether the National Treasury has established a team to investigate the extent of the undercollection of licence and spectrum fees by Icasa annually; if so, what were the findings in terms of annual financial losses to the fiscus; if not, why not;

(4) whether the National Treasury has intervened in any other way to reverse the undercollection of licence and spectrum fees by Icasa; if not, why not; if so, what are the relevant details;

(5) whether he intends to put any (a) incentives and (b) punitive measures in place to improve the collection rate; if not, why not, in each case; if so, what are the relevant details in each case?

NW2309E
REPLY:
(1) The amounts collected and paid for license fees are as follows: R744.3 million in 2009/10; R530.2 million in 2010/11; R897.5 million in 2011/12, and R941.3 in 2012/13. R388m has been collected during the first quarter of 2013/14.

(2) In terms of Section 38(1)(c) and (f) of the PFMA the Accounting Officer of ICASA is responsible to collect all money due to the constitutional institution and must settle all contractual obligations and pay all money owing, including intergovernmental claims, within the prescribed and agreed period. In addition, Section 39(2)(b) requires the Accounting Officer to report to the Executive Authority and the National Treasury any impending under collection of revenue.

In addition to communication received from ICASA, National Treasury monitors the payments into the National Revenue Fund and reviews the Annual Report and Financial Statements of ICASA and hence is aware of the outstanding liabilities.

(3) No, the National Treasury has not established any such team. Under-collection of licence and spectrum fees, and other outstanding liabilities, are subject to the internal and external audit processes of ICASA. The draft 2012/13 financial statements indicate receivables of approximately R713 million

(4) In the case of the Department of Defence, which has a substantial unresolved invoice for outstanding licence and spectrum fee obligations, the relevant Treasury officials are in discussion both with ICASA and the department concerned.

(5) If necessary, following discussion with ICASA and departments or entities affected, further steps will be taken in terms of the Public Finance Management Act to ensure that all monies due to the National Revenue Fund are timeously collected. However, the Treasury is confident that unresolved matters will be dealt with through consultation between ICASA and affected parties.

Reply received: August 2013

QUESTION NUMBER: 1814 [NW2162E]
DATE OF PUBLICATION: 26 JULY 2013
1814. Mr G G Hill-Lewis (DA) to ask the Minister of Finance:

(1) How many consultants has the National Treasury contracted and/or appointed (a) in the (i) 2009-10, (ii) 2010-11, (iii) 2011-12 and (iv) 2012-13 financial years and (b) since 1 April 2013;

(2) how many consultants contracted and/or appointed by the National Treasury (a) in the (i) 2009-10, (ii) 2010-11, (iii) 2011-12 and (iv) 2012-13 financial years and (b) since 1 April 2013 are former officials of the National Treasury and/or former public servants?
NW2162E

REPLY:

(a)	Period	No. of consultants contracted
(i)	1 April 2009 to March 2010	16
(ii)	1 April 2010 to 31 March 2011	4
(iii)	1 April 2011 to 31 March 2012	16
iv)	1 April 2012 to 31 March 2013	5
(b)	1 April 2013 to date	5

Reply received: October 2013

QUESTION NUMBER: 1781 [NW2128E]
DATE OF PUBLICATION: 26 JULY 2013
1781. Mr N J van den Berg (DA) to ask the Minister of Finance:

What (a) buildings under the administration of (i) the National Treasury and (ii) entities reporting to him are national key points and (b) criteria were used to classify them as such?
NW2128E
REPLY

(a) There are no buildings under the administration of National Treasury, nor entities reporting to Ministry of Finance which are classified as national key points. However it must be noted that some of our entities such as SARS have presence at ports of entry such as airports, harbors and land ports which may be national key points.

(b) Not applicable.

Reply received: September 2013

QUESTION NUMBER: 1780 [NW2127E]
DATE OF PUBLICATION: 26 JULY 2013
1780. Mr T D Harris (DA) to ask the Minister of Finance:

Whether, with regard to the National Treasury's intention to table legislation to introduce a youth employment tax incentive (details furnished), the proposed Bill will be subjected to consideration by the National Economic Development and Labour Council (Nedlac); if so, how does he intend to gain the support of all constituencies at Nedlac as per the requirement set out in commitment number six in the Youth Employment Accord? NW2127E

REPLY:

The Employment Tax Incentive Bill will be a money bill, and its process for consideration is governed by the Money Bills Amendment Procedure and Related Matters Act No 9 of 2009. Any further consultation processes will be finalized once the Bill has been approved by Cabinet.

The discussion paper "Confronting youth unemployment: Policy options for South Africa" which was published in February 2011, has already been discussed at Nedlac, and government has taken into account all comments received when finalising the Bill.

The Youth Employment Accord commits all constituents to do what is within their power to address the problem of youth unemployment, and also provides scope to learn from the results of what we do. This is precisely what government intends to do with the Bill. I expect broad support for the Bill from the signatories of the accord, as they have all committed themselves towards addressing the plight of the unemployed youth. To the extent that there may be any stakeholder who may have reservations on the Bill, government will engage with them in a constructive manner.

Reply received: August 2013

QUESTION NUMBER: 1747 [NW2094E]
DATE OF PUBLICATION: 26 JULY 2013
1747. Dr W G James (DA) to ask the Minister of Finance:

What is the (a) make, (b) model, (c) year and (d) purchase price of each vehicle that was bought for official use by (i) him and (ii) the Deputy Minister since 1 January 2012?

NW2094E
REPLY:

(i) (a)(b)(c)(d) Not applicable. No vehicle was purchased during this period for the use of the Minister.

(ii) (a) Nissan
(b) Pathfinder 3.0DCI 4x4 AT LE
(c) 2012
(d) R552,751.45

Reply received: July 2013

QUESTION NUMBER: 1657 [NW2003E]
DATE OF PUBLICATION: 21 JUNE 2013
1657. Mr M G P Lekota (Cope) to ask the Minister of Finance:

(1) Whether the Government had rigorous measures in place to contain the revised consolidated budget deficit for the 2013-14 financial year at 5,2% of gross domestic product to prevent further erosion of the diminished fiscal space; if not, why not; if so, what are the relevant details;

(2) whether the specified measures had been endorsed by the Cabinet; if not, why not; if so, what are the relevant details?
NW2003E
REPLY:

(1) As stated in the 2013 Budget Review, government expects the budget deficit to be 4.6 percent of GDP in 2013/14. There have not been any revisions to the budget deficit from what was published in the 2013 Budget Review. The 2013 Budget Review emphasizes government's commitment to consolidate the budget deficit which reflects the fiscal stance that seeks to ensure countercyclicality, debt stabilisation and intergenerational equity. Government has reduced core spending plans by R10.4 billion over the next three years through:

▪ Moderating the growth of non-interest expenditure. Real non-interest expenditure is projected to grow at an average rate of 2.3 percent per year over the medium term, down from 2.9 percent projected in October 2012.
▪ Reducing the unallocated portion of spending by trimming the contingency reserve, which will now be R4 billion in 2013/14, R6.5 billion and R10 billion over the remaining two years of the MTEF. New policy initiatives over the MTEF will now have to be financed from savings, efficiency gains and reprioritisation.
▪ Reprioritising resource allocation which will in turn strengthen service delivery, with a specific emphasis on the efficiency of spending.


(2) The 2013 Budget Review was presented to and endorsed by Cabinet.

Reply received: September 2013

QUESTION NUMBER: 1665 [NW2012E]
DATE OF PUBLICATION: 26 JULY 2013
1665. Mr P J Groenewald (FF Plus) to ask the Minister of Finance:

What measures are in place to ensure that the private information of high net worth individuals and investors in South Africa is not abused, exploited and distributed by banks and private bankers in South Africa?
NW2012E
REPLY:

The government takes measures to protect the private information of all individuals in South Africa, and does not favour or discriminate on the bases of wealth or activity. Hence there are generally no separate or different measures for high or low net worth individuals. Financial service providers, including banks, are under an obligation to keep the personal information of all their clients confidential.

The General Code of Conduct for Authorised Financial Service Providers (including banks) to the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act) states the following under Part II, General Provisions, section 3(3), Specific Duties of a provider: "A provider may not disclose any confidential information acquired or obtained from a client or, subject to subsection 4(1), a product supplier in regard to such client or supplier, unless the written consent of the client or product supplier, as the case may be, has been obtained beforehand or disclosure of the information is required in the public interest or under any law." There is also a general duty of care to the clients and financial industry in FAIS – General Code of Conduct for Authorised Financial Service Providers and Representatives, Part II, General Provisions, section 2, General Duties of a provider: "A provider must at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial industry".

Offences and Penalties within FAIS are dealt with in terms of section 36, "on conviction is liable to a fine not exceeding R 1 000 000 or to imprisonment for a period not exceeding 10 years, or to both such fine and imprisonment". Civil remedies are also covered in terms of section 33 (2) "The registrar may institute action in a Court against any person who has contravened or not complied with any provision of this Act, for payment of:

(a) an amount determined by the Court as compensation for losses suffered by any other person in consequence of such contravention or non-compliance;

(b) a penalty for punitive purposes in a sum determined in the discretion of the Court;

(c) interest;

(d) costs of suit on such scale as may be determined by the Court"

Other general (non-financial) legislation falling under other Ministries, also applies, like the Consumer Protection Act and Regulations, Act 68 of 2008 (CPA), also has provisions and regulations on how an intermediary keeps records and documentation safe. Further, the coming Protection of Personal Information Bill (POPI), once enacted, will also cover data privacy in more detail.

Reply received: July 2013

QUESTION NUMBER: 1656 [NW2002E]
DATE OF PUBLICATION: 21 JUNE 2013
1656. Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether he intends to request any entity or person to devise a methodology for supplementing the quarterly gross domestic product (GDP) figures with socially relevant economic statistics on the (a) gain or loss of quality jobs, (b) improvement, stagnancy or decline in levels of income distribution, (c) rise or decline in delivery of new houses in all categories (details furnished), (d) growth or decline in incomes of participants in the informal economy and (e) increase or decrease in government infrastructure expenditure as a percentage of its total expenditure; if not, why not, in each case; if so, what (i) entity or person and (ii) are the further relevant details in each case?
NW2002E

REPLY:

It should be noted that GDP growth is a primary indicator of the health of an economy. Strong GDP growth generally indicates an economy where investment is increasing and jobs are being created. Since taxes are levied on economic activity, high GDP growth rates increase the size and value of the tax based that pays for public spending.

Quarterly GDP data is already supplemented by a range of regular data releases from Statistics South Africa, including labour market and social statistics. In addition to these data releases, the Presidency publishes Development Indicators for South Africa on an annual basis, also covering many of the economic and social indicators you mention.

With respect to the specific areas you have raised

a) Gain or loss of quality jobs
It is not clear what is meant by "quality jobs" in this context. Notwithstanding this, every quarter, Statistics South Africa produces both a quarterly labour force survey and the quarterly employment statistics which provide important information about employment.

The labour force survey is a household survey that measures the number of jobs in the formal and informal sectors, consistent with definitions from the International Labour Organisation. It includes data about conditions of employment.

The quarterly employment statistics data provides a detailed breakdown of employment and earnings by sector. Although this information is only available for employees of non-agricultural companies registered for VAT, it is still an important indicator of formal employment trends.

b) Levels of income distribution
Every five years, Statistics South Africa publishes the results of the Income and Expenditure Survey (IES), which covers the expenditure and income patterns of 33 000 households. The survey is comprehensive and includes diary-records of expenditure purchases as well as follow up interviews. The latest IES was released in October 2012.

Statistics South Africa also publishes the Living Conditions Survey, the latest report of which was released in March 2008.

The quarterly employment statistics also provide useful information on a more frequent basis to understand the earnings of those in formal, non-agricultural employment.

c) Housing statistics
There are a range of providers of information on the housing market in South Africa, with each focusing on a slightly different area.

Statistics South Africa provides monthly information on the number of building plans passed and completed in the major metro areas on residential, non-residential and additions and alterations, financed by the private sector, from the largest local government institutions in South Africa. The monthly survey represents about 86 per cent of the total value of buildings completed but excludes the bulk of low-cost dwelling-houses.

The Department of Human Settlements produces annual information on the number of RDP houses in construction and those completed, by province.
The Deeds Registry provides information on all property transfers and land registrations, including the value of the house.

d) Incomes of participants in the informal economy
The IES and LCS surveys described earlier capture spending and income information for all South Africans, not just those in the formal economy.

e) Government investment spending.
Government provides detailed information on its spending plans and actual expenditure. Table 7.2 in the Budget Review outlines the investment figures in detail. The Estimates of National Expenditure also record total capital investment spending and the type of investment spending by Budget vote.

Statistics South Africa is under the direction of the Minister in the Presidency: National Planning Commission. Should there be any additional follow up questions, the Statistician-General and responsible Minister would be best placed to provide the further information.

Reply received: July 2013

QUESTION NUMBER: 1655 [NW2001E]
DATE OF PUBLICATION: 21 JUNE 2013
1655. Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether, in view of heavy borrowing by the State since 2009, a depletion of contingency funds and the rising cost of servicing the debt, the Government has formulated detailed plans, over and above the recent haircuts with regard to departments, to counter the next recession, when it occurs, with a new and vigorous Keynesian response; if not, why not; if so, what are the relevant details?
NW2001E
REPLY:

Fiscal policy began adjusting to a new economic situation with the onset of the global financial crisis. After nearly a decade of rapid expansion in non-interest expenditure, government began to reduce the rate of growth in the budget while continuing to support the economy. This approach was made possible by the fiscal space built up in previous years. The narrowing of fiscal space, in combination with the erosion of the link between budget inputs and social outputs, implies the need for additional measures to secure the country's fiscal footing and improve the quality of spending. To rebuild fiscal space, government has proposed the following measures:

▪ Government expenditure to remain within a predetermined expenditure ceiling
▪ Expenditure reviews which should help improve value for money in public spending
▪ Review of tax policy

These measures will ensure debt sustainability and rebuild fiscal space which will assist in dealing with future crises.

Reply received: September 2013

QUESTION NUMBER: 1574 [NW1920E]
DATE OF PUBLICATION: 21 JUNE 2013
1574. Mr T D Harris (DA) to ask the Minister of Finance:

(1) What research was conducted to validate the National Treasury's decision not to abolish the levy on electricity from nonrenewable resources?

(2) is it the National Treasury's intention to maintain the levy on electricity from nonrenewable resources once the carbon tax has been implemented?

(3) how will the levy be structured in order to avoid double taxation?
NW1920E
REPLY:

(1) The research done by the National Treasury is contained in the latest policy document on carbon taxes titled Carbon Tax Policy Paper, published on 02 May 2013 and available on the National Treasury website at: http://www.treasury.gov.za/public%20comments/Carbon%20Tax%20Policy%20Paper%202013.pdf

The approach to the levy on electricity should be seen within this broader framework; which considers the potential link between the proposed carbon tax and the current electricity levy imposed on electricity generated from nonrenewable resources (and nuclear energy) which is discussed in the carbon tax paper. Specific facts that informed the National Treasury's decision to not abolish the levy on electricity from nonrenewable resources include the fact that revenue amounting to 1 cent/kwh of the current electricity levy is being applied towards funding subsidies for the rollout of solar water heaters (including the so-called Eskom subsidy for solar water heaters/geysers) and 0.5 cent/kwh is dedicated towards rehabilitating some of the roads being damaged by coal trucks transporting coal to the various power stations in Mpumalanga and surrounding areas.

(2) and (3) Yes the intention is the maintain the electricity levy to cover as minimum the two elements discussed in response to question 1 above. Hence, as part of the revenue recycling options discussed in the carbon tax policy paper, the electricity levy could, for example, be phased down to around 2 cent per kwh from the current 3.5 cent per kwh over a two to three year period following the introduction of the carbon tax. In real terms this would mean a substantial reduction in the impact of this levy

The following extract from page 18 of the said Carbon Tax Policy Paper addresses some of the questions raised by the honourable member.

"In the context of an initial relatively low, effective carbon tax rate (taking into account an initial modest rate and the tax-free thresholds), it can be argued that there is unlikely to be any effective double taxation in the foreseeable future. Double taxation may only become an issue if the carbon tax rate is set at a sufficiently high level to fully internalise the external costs associated with carbon emissions. The gradual phasing-down and restructuring of the current electricity levy (energy tax) could be considered as the effective carbon tax is increased over time".

Reply received: July 2013

QUESTION NUMBER: 1577 [NW1923E]
DATE OF PUBLICATION: 21 JUNE 2013
1577. Mr D C Ross (DA) to ask the Minister of Finance:

Whether local pension funds face the threat of prescribed asset classes if they do not make voluntary infrastructure investments; if so, what policies justify such pressure?
NW1923E

REPLY:

Local pension funds do not face a threat of prescribed assets because it is not Government policy to tell pension funds how to invest. It is up to the trustees of pension funds to decide how and where to invest, as long as their decisions are within the framework of Regulation 28 in terms of the Pension Funds Act of 1956. South Africa will require long-term savings and investments to deal with some of its economic challenges. Pension funds, as long-term investors, have played and can continue to play this natural long-term funding role without the need for coercion. It should also be noted that Regulation 28 requires trustees to consider Environmental, Social and Governance (ESG) factors when determining their investment policies and strategies.

Reply received: July 2013

QUESTION NUMBER: 1575 [NW1921E]
DATE OF PUBLICATION: 21 JUNE 2013
1575. Mr T D Harris (DA) to ask the Minister of Finance:

(a) What was the vacancy rate in levels 13 to 16 in the National Treasury in the past 12 months and (b) in each case, (i) for how long has the position been vacant and (ii) when will it be filled?

NW1921E
REPLY:

(a) As reported in the 2012/13 Annual report, the vacancy rate for levels 13 to 16 was 9.09%. The rate has increased to 11.1% as at the 31st May 2013 (35 vacancies from 314 funded positions), as a result of newly funded positions, transfers out of the Department and terminations.

(b) (i) and (ii) are outlined in the table below.

POST JOB TITLE DESCRIPTION	LEVEL	VACANT SINCE	(i) [MONTHS]	(ii) [ENVISAGED DATE]
Accountant-General	15	01-May-13	1	Position advertised on 5 May 2013, now at interview stage.
DDG: Intergovernmental Relations	15	01-May-13	1	Position advertised on 5 May 2013, now at interview stage.
Chief Director: SCM Governance, Mon. & Compliance	14	01-Apr-13	2	Interviews conducted, appointment by September 2013.
Chief Director: Strategic Procurement	14	01-May-13	1	Interviews conducted, appointment by September 2013.
Chief Director: SCM Information & Communication Technology	14	01-May-13	1	Interviews scheduled. Post should be filled by September 2013.
Chief Director: Performance & Development	14	01-Mar-13	3	Post filled with effect 1 June 2013.
Chief Director: African Economic Integration	14	01-Apr-13	2	Post filled with effect 1 July 2013.
Head: National Capital Project	14	01-Jul-10	36	Post filled with effect July 2013.
Chief Director: SCM Client Support	14	01-May-13	1	Newly funded position in the OCPO, to be filled within 3 months.
Chief Director: Micro Economic Policy	14	01-May-13	1	Interviews conducted. Post should be filled by August 2013.
Senior Manager: Quality Assurance & Complaint Audit	13	01-Apr-13	2	Interviews are scheduled for 3 July 2013. Post should be filled by September 2013.
Director: Banking Development	13	16-Apr-13	2	Funds to be moved to another position as a result of reorganization.
Director: International Finance	13	01-Jan-13	5	Lateral transfer memo to be finalised. The post should be filled by August 2013.
Director: Water & DPLG	13	01-Mar-13	3	Lateral transfer memo to be finalised. The post should be filled by August 2013.
Director: Fiscal Framework	13	01-Dec-12	6	Interview conducted, no suitable person found. Sourcing additional applications. Post should be filled by September 2013.
Divisional Support Manager	13	01-Feb-12	16	Interviews to be finalised in July 2013. Post should be filled by October 2013.
Director: CGE Modeling	13	01-Jul-12	11	Post filled with effect 1 July 2013.
Director: Accounting Support And Reporting	13	05-Apr-13	2	Offer accepted. Finalising start date for mid July 2013.
Director: Accounting Support And Reporting	13	01-Jan-13	5	Post filled with effect 1 June 2013.
Director: Integrated Justice Cluster	13	09-Nov-12	7	Interviews conducted, appointment by August 2013.
Director: Police & ICD	13	01-Nov-12	7	Interviews conducted, appointment by August 2013.
Director: Land & Environmental Affairs & Tourism And Minerals	13	01-Apr-13	2	Interviews conducted, appointment by August 2013.
Director: Health & Social Development	13	01-Feb-12	16	Interviews conducted, appointment by August 2013.
Director: Supply Chain Implementation	13	01-May-13	1	Advert to be published 30 June 2013.
Director: Operations	13	01-Mar-12	15	Re-organising the office of the DG.
Director: Policy Support & Africa Outreach	13	01-May-13	1	Interviews conducted, appointment by September 2013.
Director: Financial And International Taxes	13	01-Feb-13	4	Post filled with effect 1 July 2013.
Director: Environmental And Fuel Taxes	13	03-Sep-12	9	Post filled with effect 1 June 2013.
Director: Public Sector Personnel Policy	13	01-Nov-11	19	Post filled with effect 1 July 2013.
Director: Provincial Budget Analysis	13	01-Dec-12	6	Post filled with effect 1 June 2013.
Director: Organisational Development	13	01-Mar-13	3	Interviews to be scheduled in July 2013. Post to be filled by September 2013.
Senior Manager: Performance Audit	13	01-Apr-13	2	Interviews conducted, appointment by September 2013.
Director: Systems Integration	13	01-Apr-13	2	Interviews took place, no suitable candidate found. Sourcing additional applications, to be filled within 3 months.
Director: Regulation And Competition	13	01-Jan-11	29	Interviews to be scheduled in July 2013. To be filled within 3 months.
Director: Environmental Economics	13	01-Apr-13	2	Interviews scheduled for 27 June 2013. To be filled within 3 months.

Reply received: July 2013

QUESTION NUMBER: 1573 [NW1919E]
DATE OF PUBLICATION: 21 JUNE 2013
1573. Mr T D Harris (DA) to ask the Minister of Finance:

(1) (a) What amount in rand value has been received by South Africa in United Kingdom (UK) aid in the past five years respectively and (b) by what amount has it recently been reduced;

(2) which (a) institutions and (b) public departments have benefited from the UK aid in the past five years respectively;

(3) did he at any stage discuss the cut in UK aid with the British government before it was announced;

(4) what steps will the National Treasury take to counter the impact of the UK aid cuts?

NW1919E
REPLY:

(1) (a) Total amount received through the RDP Fund (government's mechanism for channeling ODA to implementing agencies) is R155 million for the past five years. Amounts received per year are set out in the table below:

Fiscal	R million
2007/08
2008/09	11
2009/10	39
2010/11
2011/12	95
2012/13	10
Total	155

However, the current British aid envelope for South Africa is £76 million and equivalent to an average of £19 million per annum for the period 2011-2015.

(b) National Treasury was informed by the UK-DFID regarding the possible reduction in future aid envelope for SA beyond 2015. Therefore, the size of the next envelope is unknown since the decision remains the prerogative of the British government.

(c) R155 million was fully allocated to the following institutions and national departments:

R million

Department of Trade and Industry	131.0
Department of Social Development	10.9
The Presidency: Monitoring and Evaluation	6.9
Stats	3.4
SARS	2.6

155

(d) The Minister of Finance responded to the announcement of the cut in British aid to South Africa as follows: "I noted but did not agree with Britain's new aid strategy. I indicated that we needed to debate South Africa's development challenges".

(e) It should be noted that, both aid recipient countries and donors are confronted by new opportunities and challenges ushered in by shifting global patterns of wealth, poverty, trade and geopolitical power. Although the global development landscape has always been characterized by change, the current agenda focuses on the role of Middle Income Countries (MICs) in development cooperation. Amid these developments many donors have changed their aid strategies, whilst other donors are still redefining and shaping their work and relationships with MICs. Britain and South Africa are not immune to these developments.

Through different high level meetings/forums/global platforms etc, the Government of South Africa continues engaging major development partners advocating the need for further aid support despite being classified as an Upper Middle Income Country. South Africa is not dependent on development aid. However, the transfer of skills, technology and knowledge is very important for South Africa's development.

Reply received: July 2013

QUESTION NUMBER: 1537 [NW1884E]
DATE OF PUBLICATION: 14 JUNE 2013
1537. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

Whether any banks are experiencing liquidity problems at present; if so, what are the relevant details?
NW1884E
REPLY:

No. The banks in South Africa continue to be healthy as noted by the Registrar of Banks in the latest Annual report of the Banking Supervision Department (BSD) of the South African Reserve Bank (SARB) released on 27th May 2013 and tabled on the 20th June 2013. The report notes that

"The South African banking sector continued to post healthy profitability numbers, supported by generally improved quality of assets. The banking sector remained adequately capitalized in terms of the current minimum regulatory requirements." (BSD 2012 Annual Report – page 7)

http://www.resbank.co.za/Publications/Reports/Pages/BankSupervisionAnnualReports.aspx

Reply received: July 2013

QUESTION NUMBER 1536 NW1883E
DATE OF PUBLICATION 14 June 2013
1536. Mr D A Kganare (Cope) to ask the Minister of Finance:

(1) (a) How many (i) people and (ii) companies were found to be involved in the smuggling of illegal cigarettes in the

(aa) 2010-11,
(bb) 2011-12 and
(cc) 2012-13 financial years and

(b) what was the total worth of the cigarettes;

(2) whether any of these perpetrators were criminally charged; if not, why not; if so, what are the relevant details;

(3) (a) how many of these perpetrators were successfully prosecuted and

(b) what was the (i) lowest and (ii) highest sentence meted out?

REPLY

1. (a) (i)(ii) A total of 2481 cases of suspected smuggling or counterfeiting of cigarettes involving both individuals and companies were investigated by SARS during the 2010-11, 2011-12 and 2012-13 financial years. Of which the following were recorded in each financial year:

(aa) In 2010-11 financial year – 499 cases
(bb) In 2011-12 financial year – 1026 cases
(cc) In 2012-13 financial year – 956 cases

1. (b) A combined total worth of seized and detained cigarettes during the 3 financial years amounted to approximately R366 million. Of this the total worth of cigarettes seized during this period was approximately R287 million and the total worth of cigarettes detained was approximately R78 million.

2. Out of the total 2481 cases, a total number of 1840 criminal cases were handed over to the National Prosecuting Authority (NPA) for prosecution.

3. (a) 1124 were successfully prosecuted
(b) (i) The lowest sentence was a fine of R1500
(ii) The highest sentence was a fine of R200 000 or 4 years imprisonment of which R100 000 or 2 years imprisonment was suspended for 5 years.

Reply received: July 2013

QUESTION NUMBER: 1532 [NW1879E]
DATE OF PUBLICATION: 14 JUNE 2013
1532. Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether the Government is taking immediate measures to implement the further tightening of the accountability framework to ensure that state resources are utilised in a manner consistent with the prescripts of the law, as recommended in the 2013 Fiscal and Financial Commission report; if not, why not; if so, (a) what steps and (b) what are the time frames in this regard?

NW1879E

REPLY:

Government, under the leadership of National Treasury, is undertaking various initiatives to further tighten the accountability framework to ensure that state resources are utilised in a manner consistent with the prescripts of the law.

The National Treasury is in a process of revising and updating the Treasury Regulations issued in terms of the Public Finance Management Act, 1999 (Act 1 of 1999). Specifically, chapters in the regulations on supply chain management are being enhanced to strengthen governance, financial management accountability and processes around procurement to combat fraudulent practices. The revised Treasury Regulations will be published before the end of the calendar year and will take effect as from 1 April 2014.

For municipalities, National Treasury is considering comments received on the Municipal Finance Management Act, 2003 (Act 56 of 2003) (MFMA) regulations related to financial misconduct, with a view to concluding the regulations within the coming months. The regulations seeks to improve internal processes, improve reporting and actions taken by municipalities and municipal entities to deal effectively with allegations of financial misconduct, consistent with Chapter 15 of the MFMA and complements other provisions in the Municipal Systems Act and its regulations. The National Treasury has issued a New Annual Reporting Guide and framework that seeks to improve the quality, content, information and timing of municipal annual reports. This reform is being phased in and will contribute to improvement in the accountability framework for municipalities.

In addition to the above there is a process in place for finalizing a standardised classification framework for local government through the regulation of a 'standard chart of accounts' (SCOA) for municipalities. Such uniform expenditure classifications have already been established and implemented for national and provincial government. The object of these Regulations is to provide for a national standard for the uniform recording and classification of municipal budget and financial information at a transaction level by means of the prescription of a standard chart of accounts for municipalities, aligned with prescribed budget formats and accounting standards. This provides for the availability of uniform information sets recorded in terms of national norms and standards across the whole of government for the purposes of national policy coordination and reporting, benchmarking and performance measurement in the local government sphere. The introduction of a uniform classification framework provides for the continuous improvement in the quality, content and credibility of financial reporting. It is envisaged that the draft regulation will undergo formal legislative consultation to the middle part of this year and the Regulation will be finalized to the latter part of the current year.

The PFMA and MFMA states clearly that accountability resides with the accounting officer and the executive authority in the different spheres of government, allow managers to manage, has been the central feature of the legislation. Hence, accountability and responsibility for actions taken on financial management resides with departments and municipalities.

Reply received: July 2013

QUESTION NUMBER: 1455 [NW1800E]
DATE OF PUBLICATION: 7 JUNE 2013
1455. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

(a) What was the value of the capital inflow of foreign investment into South African bonds for the first quarter of 2013 and (b) how does it compare with the previous quarters of 2012?

NW1800E
REPLY:

(a) The value of capital inflows of foreign investment into South African bond market in the first quarter of 2013 (Jan- March 2013) amounted to R14 billion.

(b) The value recorded in the first quarter of 2013 is lower compared to the previous quarters in 2012. The quarterly capital inflows into the South African bond market in 2012 were as follows; first quarter - R20 billion, second quarter - R27 billion, third quarter - R28 billion and fourth quarter R17 billion.

Reply received: July 2013

QUESTION NUMBER: 1454 [NW1799E]

DATE OF PUBLICATION: 7 JUNE 2013
1454. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

Whether a representative of the late Colonel Muammar Gaddafi's family contacted the Treasury to assist them in depositing (a) money and (b) other assets in a South African bank; if so, what are the relevant details?
NW1799E

REPLY:

The National Treasury has not been approached by a representative of the late Colonel Muammar Gaddafi's family to assist them in depositing money or other assets in a South African bank, nor is it the business of National Treasury to assist foreign nationals to open bank accounts in South Africa.

I recently released a media statement to deal with the media reports of the past few weeks in which there has been a blurring of facts and allegations, with the allegations been treated as fact.

In the statement I explained that I had met a delegation purporting to be from the Libyan government in May which claimed to be seeking assistance in identifying assets supposedly in South Africa. Subsequently I have met a Libyan Government delegation led by Mr Usama al Abid, the Minister in the Office of the Libyan Prime Minister. We agreed that should any funds and assets be found, we will inform the Libyan Minister and the relevant UN authorities through the Department of International Relations and Cooperation (DIRCO). The Libyan authorities and the UN will determine the future of these assets and funds.

Please find attached media statement released on the 20th June 2013.

Reply received: July 2013

QUESTION NUMBER: 1403 [NW1745E]
DATE OF PUBLICATION: 7 JUNE 2013

1403. Mr M W Rabotapi (DA) to ask the Minister of Finance:

What amount did the National Treasury spend on (a) promotional items and (b) cocktail receptions on the occasion of his 2013 Budget Vote debate?

NW1745E

REPLY:
(a) None
(b) None

Reply received: July 2013

QUESTION NUMBER: 1311 [NW1641E]
DATE OF PUBLICATION: 31 MAY 2013
1311. Mr M W Rabotapi (DA) to ask the Minister of Finance:

(1) Whether (a) he, (b) his deputy minister, (c) any specified officials and (d) any other persons have been issued with a government or official credit card (i) in the (aa) 2011-12 and (bb) 2012-13 financial years and (ii) since 1 April 2013 up to the latest specified date for which information is available; if so, in each instance, what is the (aaa)(aaaa) name and (bbbb) job title of each person to whom a credit card was issued, (bbb) credit limit, (ccc) outstanding amount as at the latest specified date for which information is available, (ddd) monthly expenses incurred for each month since receiving the credit card, (eee) reason for such a person being issued with a credit card and (fff) uses that such a credit card is intended for;

(2) whether the credit limit of any specified credit card was exceeded at any time since it was issued; if so, (a) whose credit cards are over the limit and (b) what is the reason for the credit card exceeding the limit?
NW1641E

REPLY:
(1) No credit cards have been issued to any person referred to in question 1 (a – d).
(2) Not applicable

Reply received: August 2013

QUESTION NUMBER: 1252 [NW1499E]
DATE OF PUBLICATION: 24 MAY 2013

Adv A de W Alberts (FF Plus) to ask the Minister of Finance:

(1) (a) How many and (b) which pension funds established by the State are there in the (i) Public Service as a whole and (ii) in public entities;

(2) what is the (a) size and (b) investment mandate and style of each pension fund;

(3) which pension funds (a) fall under jurisdiction of the Pension Funds Act, Act 24 of 1956, and (b) have been established in terms of unique and separate legislation;

(4) (a) which pension funds have a board of trustees that does not operate independently of the employer and (b) what is the reason for this?
NW1499E

REPLY

In terms of the information submitted by the Financial Services Board, Government Pension Administrative Agency and National Treasury:

(1)(a) There are 3 public service pension funds.

(1)(b)(i) The public service funds are: Associated Institutions Pension Fund (AIPF); Temporary Employees Pension Fund (TEPF); and Government Employees Pension Fund (GEPF).

(1)(b)(ii) The FSB does not have consolidated and comprehensive information on the retirement funds of the 200 schedule 2, 3A and 3B public entities listed as at 31st March 2013. I will ask the Financial Services Board (which recently appointed a new Deputy Executive Officer for Pensions) to collect this information and report back to me in six months. I wish to thank the Honourable Member for raising this matter.

(2)(a) The AIPF has 2 521 active members.

The TEPF has 123 active members.

The GEPF has 1 275 278 active members.

(2)(b) The GEPF had assets valued at R1 trillion in March 2012.

GEPF Investment Strategy

Strategic Asset Allocation percentage

	Minimum	Strategic allocation percentage	Maximum
Domestic equities	45%	50%	55%
Domestic property	2%	5%	8%
Domestic bonds	22%	31%	40%
Cash/money market instruments	0%	4%	8%
Foreign equities	1%	3%	5%
Foreign bonds	0%	2%	4%
Africa (excluding South Africa)	0%	5%	5%
Total		100%

Source: GEPF

(3)(a) All occupational pension funds fall under the Pension Funds Act, No. 24 of 1956 except for GEPF, AIPF, TEPF, Transnet Pension Funds, Post Office Pension Fund and the Telkom Pension Fund.

(3)(b) GEPF: The GEPF was established in terms of the Government Employees Pension Law, Proclamation 21 of 1996 (GEP Law).

AIPF: The AIPF was established in terms of the Associated Institutions Pension Fund Act No. 41 of 1963.

TEPF: The TEPF was established in terms of the Temporary Employees Pension Fund Act No. 75 of 1979.

Transnet Pension Funds: The Transnet Pension Funds were established under the Transnet Pension Funds Act No. 62 of 1990.

Post Office and Telkom Pension Funds: The Post Office Retirement Fund and The Telkom Pension Fund were established in terms of the Post Office Act No. 44 of 1958.

4(a) None. GEPF, Transnet, Post Office and Telkom Pension funds Boards of Trustees operate independently of the employer.

Neither the AIPF nor the TEPF have a Board of Trustees. The authorising legislation of both the TEPF and AIPF does not require a board of trustees.

4(b) Not applicable, given the answer in 4(a).

Reply received: June 2013

QUESTION NUMBER: 1214 [NW1460E]
DATE OF PUBLICATION: 24 MAY 2013
1214. Mr M W Rabotapi (DA) to ask the Minister of Finance:

What amount has the National Treasury spent on (a) catering and (b) entertainment in the (i) 2012-13 financial year and (ii) since 1 April 2013?
NW1460E

REPLY:
(a)(i) R1,834,088.51
(a)(ii) R 174,648.07
(b)(i) R 229,979.85
(b)(ii) R 33,879.20

Reply received: June 2013

QUESTION NUMBER: 1171 [NW1417E]
DATE OF PUBLICATION: 02 MAY 2013
1171. Mr MGP Lekota (Cope) to ask the Minister of Finance:

Whether any decision was taken by the Government to support the request he made in his Budget Speech on 27 February 2013 to strengthen the capacity of Parliament, the Department of Performance Monitoring and Evaluation and Administration in the Presidency, the Auditor-General, the Accountant-General and the National Treasury to ensure that Government (a) meets its financial targets and (b) achieves its intended developmental outcomes; if not, why not; if so, what are the relevant (i) details and (ii) time frames?

REPLY
Parliament
Parliament has informed National Treasury that the process of restructuring the organizational structure was completed by the end of April. The report by the consultants is being processed. Once approved, Parliament will discuss with National Treasury their request for additional funding and the number of positions to be filled during the current budget process.

Performance Monitoring and Evaluation
On strengthening the capacity in the department of Performance Monitoring and Evaluation, the department, in consultation with the National Treasury, has completed its review of the structure in its effort to see how best or efficient to allocate resources and to align the department's functions within the programmes with the strategic objectives. The department's budget allocation has since inception in 2010/11 increased significantly from R47.3 million to R193.4 million in 2013/14 and all critical posts have been funded. Overall, the structure of the DPME was fully funded, with personnel numbers having grown from 7 in 2010/11 to 202 in 2013/14.

National Treasury and the Accountant General
The National Treasury has begun to implement the strengthening of the OAG's office through increased recruitment and funding as follows:

Personnel increases in the OAG:

Headcount	2009/10	2010/11	2011/12	2012/13
Filled posts	138	148	162	173

Budget increases in the OAG (focus Special Audit Services):

Exclusive of the DDG: Accountant General amounts, the expenditure for the OAG's office is expected to increase from R107.2 million in 2009/10 to an estimated R220.1 million in 2015/16.

The strengthening and enhancement initiatives have been across the OAG's office with a specific focus on the Special Audit Services (SAS) unit which was being supported with a total allocation of R125.8 million over the 2012 MTEF mainly in consultant spending to address governance aspects, which include measures to reduce corruption. This allocation increased slightly to R128.3 million over the 2013 MTEF. The R128.3 million allocation over the MTEF is made up of R41.9 million in 2013/14, R42.5 million in 2015/16 and R43.9 million in 2015/16.

In 2012/13, this sub-programme was allocated R38.7 million and topped up by a R10 million rollover. By the end of that year (2012/13), the SAS unit had spent R51.1 million. This increased spending is as a direct result of the Capacitation and strengthening initiatives effected by the department which saw the SAS unit increase from 3 filled posts in 2009/10 to 15 filled posts in 2012/13.

Reply received: July 2013

QUESTION NUMBER: 1144 [NW1377E]
DATE OF PUBLICATION: 17 MAY 2013
1144. Mr T D Harris (DA) to ask the Minister of Finance:

(1) Did the Financial Services Board commission an independent regulatory impact assessment before the introduction of the Financial Advisory and Intermediary Services Act, Act 37 of 2002 (FAIS); if not, why not; if so,

(2) will the National Treasury make it available;

(3) has the Financial Services Board commissioned a new independent regulatory impact assessment or any similar study to confirm the validity of regulatory impact assessment that was done before the introduction of the FAIS; if not, why not; if so,

(4) will the National Treasury make it available;

(5) has he found that fewer insurance policies lapsed and termination rates of insurance policies decreased since the introduction of this Act; if not, why not? NW1377E

REPLY:

I hope that the Honourable Member is not arguing for light-touch regulations for the financial sector when posing this question, which refers to a period that is more than ten years ago. The global trend today is to tighten financial regulations, and not lessen them. The FAIS legislation is designed to protect customers of financial services, and as indicated in the 2011 policy shift towards a twin peaks system of regulation (refer to the 2011 publication "A safer financial sector to serve South Africa better"), there is a need for tougher licensing and fit and proper criteria to apply to all financial services providers, and to take adequate steps to prevent theft of deposits, reckless lending, money laundering and other financial crimes. Further, by adhering to internationally accepted standards and obligations, our financial institutions are able to conduct business with other financial institutions based in countries that we deal with via trade or financial transactions.

Many of the responsible persons in the FSB ten years ago are no longer with in the FSB today, so FSB staff have had to draw from their records in 2001-02 to provide specific responses. I would also like to draw the Honourable Member's attention to my reply to a similar question PQ 1790 of 2012 (copy attached).

(1) No, the FSB did not commission an independent regulatory impact assessment before the introduction of the FAIS Act, but did commission Genesis Analytics (a private provider, and not an independent institution) to conduct a cost-benefit analysis of the proposed FAIS legislation in September 2001 prior to the enactment of the legislation in 2002. This study was made available to the Parliamentary Portfolio Committee at the time, and concluded that the benefits of the legislation would outweigh the costs of its implementation by a ratio of three to one.

(2) The cost-benefit analysis conducted by Genesis Analytics was made available to parliament at the time, and a presentation of its findings was made to the Parliamentary Portfolio Committee on Finance, on 23 January 2002, prior to the adoption of the legislation by Parliament. I am happy to arrange for a copy of the study to be made available to the Honourable Member.

(3) No, the Financial Services Board has not conducted an impact assessment of the FAIS legislation since its enactment, given the pending shift to tighter regulations following the 2008 global financial crisis. However, the impact of the Act can to some degree be assessed by considering the extent of the oversight on providers of financial services. For this purpose annual reports are submitted to Parliament by the Financial Services Board as well as by the FAIS Ombud established in terms of the Act, which reports on the number of financial service providers authorised in terms of the Act, the number of regulatory interventions by the Financial Services Board and the number of cases considered by the FAIS Ombud. The following Table reflects some of the regulatory actions that have been taken against providers of financial services since the Act came into operation in September 2004:

Type of action	Number of actions taken
Withdrawal of licence	3 724
Suspension of licence	6 266
Decline of licence application	2 120
Department of individuals by FSB	3 480
Department of representatives by financial services providers	387

The regulatory actions referred to in the Table above resulted in the removal of persons who are not fit and proper from the financial services industry.

(4) Not applicable.

(5) This question is not appropriate in order to determine the impact of the Act as various factors, outside the scope of the Act, could contribute to the number of policies being lapsed or surrendered eg. the economic cycle, new generation products that replace older policies, social factors etc. It must further be borne in mind that the main purpose of the Act is "to regulate the rendering of financial advisory and intermediary services to clients…" and not to regulate the decisions of consumers of financial services and products either in acquiring such services or products, or to dispose of or terminate such services or products.

Reply received: July 2013

QUESTION NUMBER: 1112 [NW1345E]
DATE OF PUBLICATION: 17 MAY 2013
1112. Mrs P C Duncan (DA) to ask the Minister of Finance:

(a) What total amount has (i) the National Treasury and (ii) each specified entity reporting to him spent on conferences in the (aa) 2009-10, (bb) 2010-11, (cc) 2011-12 and (dd) 2012-13 financial years and (b) what (i) amount was spent on, and (ii) is the breakdown of the expenditure for, each specified conference?
NW1345E
Reply:

These costs were incurred in the concomitance of the following conferences; African Development Fund (ADF), African Emerging Markets Alliance for Financial Inclusion (AFI), BRICS, Commonwealth, G20, G24, Global Partnership for Financial Inclusion (GPFI), Organisation for Economic Co-operation and Development (OECD), and World Economic Forum (WEF).

There were some entities that also spent on aspects relating to employee development and wellness as well as imbozos on fraud and financial fraud awareness. The Public Investment Corporation and South African Revenue Services also spent on exhibitions for educational purposes.

The relevant data is available here in the attached annexure.

Reply received: August 2013

QUESTION NUMBER: 1079 [NW1312E]
DATE OF PUBLICATION: 17 MAY 2013
1079. Ms M R Shinn (DA) to ask the Minister of Finance:

(1) What total amounts has (a) the National Treasury and (b) each specified entity reporting to him spent on (i) print and (ii) broadcast advertising in the (aa) 2009-10, (bb) 2010-11, (cc) 2011-12 and (dd) 2012-13 financial years;

(2) in each case, (a)(i) by which radio or television station were the advertisements broadcast and (ii) in which newspapers were the advertisements published in the (aa) 2009-10, (bb) 2010-11, (cc) 2011-12 and (dd) 2012-13 financial years and (b) at what cost in each specified case?


REPLY

(a)(ii)(ii) National Treasury and Entities
Print Broadcast Total What was advertised Reasons

National Treasury (aa) 2009-2010 (bb) 2010-2011 (cc) 2011-2012 (dd) 2012-2013	R 17, 092,637.75 R 3,753,00.00 R 7,070,835.18 R 2,277,439.24 R 3,991,363.33	R 61,826,889.52 R 17,321,000.00 R 22,931,432.04 R 21,550,132.52 R 17,116,962.71	R 78,919,527.27 R 17,321,000.00 R 22,931,432.04 R 21,550,132.52 R 17,116,962.71	RSA Retail Saving Bonds	To create awareness of the importance to save
Accounting Standard Board (aa) 2009-2010 (bb) 2010-2011 (cc) 2011-2012 (dd) 2012-2013	R 80,165.00 R 0.00 R 79,290.00 R 875.00 R 0.00	R 0.00 R 0.00 R 0.00 R 0.00 R 0.00	R 80,165.00 R 0.00 R 79,290.00 R 875.00 R 0.00	Vacancies for board member, technical staff and administrators	Board member's terms ended, and resignation of administrators.

Attached find here National Treasury and Entities

Reply received: May 2013

QUESTION NUMBER: 1034 [NW1260E]

DATE OF PUBLICATION: 10 MAY 2013
DUE DATE TO PARLIAMENT: 24 MAY 2013
1034. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

Whether the SA Revenue Service has rendered any services at the Waterkloof Air Force Base airport since 1 January 2010; if so, what are the relevant details?

NW1260E
REPLY:

Yes. South African Revenue Service (SARS) has rendered services at the Waterkloof Air Force base since 01 January 2010 as and when they are officially requested to do so. Where appropriate, persons arriving at the Waterkloof Air Force base are required to make declarations on the prescribed customs form.

In the case of Flight JA 9900, although Customs officers were not present when the flight landed, within hours all passengers were required to make the necessary Customs declarations in the relevant Customs forms. All Customs requirements were complied with on departure.

Reply received: May 2013

QUESTION NUMBER: 1020 [NW1244E]
DATE OF PUBLICATION: 10 MAY 2013
DUE DATE TO PARLIAMENT: 24 MAY 2013
1020. Mr T D Harris (DA) to ask the Minister of Finance:

(1) Why were SA Revenue Service (Sars) customs officials not present at the Waterkloof Airbase on 30 April 2013 to ensure that correct customs procedures were followed by the Gupta family;

(2) has the Sars Commissioner declared the Waterkloof Airbase a customs and excise airport in terms of section 6(1)(e) of the Customs and Excise Act, Act 91 of 1964;

(3) (a) who will be conducting the investigation announced by the SARS spokesperson on 1 May 2013 and (b) when will the investigation be completed? NW1244E

"REPLY:

1) SARS Customs is present at the main commercial ports of entry of South Africa. As the Justice, Crime Prevention and Security Cluster statement of 19 May 2013 explains the Air Force Base, Waterkloof, has seven functions:

▪ The conduct of operations;
▪ The hosting of training flights;
▪ Receiving VVIP and VIP flights;
▪ Receiving foreign heads of state, envoys and dignitaries;
▪ Receiving registered military aircraft;
▪ Serving as a diversion airfield for commercial aircraft; and
▪ Conducting air shows

It is, therefore, not a commercial port of entry in normal circumstances. However, when necessary SARS Customs would be called in to perform its functions. Whilst this did not happen initially, SARS management ensured that within hours as passengers in Flight JAI 9900 filled in Customs declaration forms.

The arrangements at Air Force Base, Waterkloof are currently being reviewed to ensure stronger Customs presence.

2) No, as the Air Force Base, Waterkloof, is not classified as an international airport. In terms of item 200.04 of the schedule to the rules of the Customs and Excise Act, the following 10 international airports were appointed by the Commissioner of SARS in terms of Section 6(1)(e). These airports are appointed in line with a Cabinet decision made in 1999.

▪ OR Tambo International
▪ Cape Town International
▪ King Shaka International
▪ Kruger Mpumulanga International Airport
▪ Lanseria International Airport
▪ Pilansberg International Airport
▪ Polokwane International Airport
▪ Bram Fischer International Airport
▪ Port Elizabeth International Airport
▪ Upington International Airport

3) Please refer to the JCPS statement of 19 May 2013 (attached). The SARS Management has been instructed to review the lessons arising from this event and make recommendations to the Minister of Finance on charges that need to be made to tighten and enforce customs control at relevant Ports of Entry.

Reply received: May 2013

QUESTION NUMBER: 1009 [NW1232E]
DATE OF PUBLICATION: 10 MAY 2013
1009. Mr T W Coetzee (DA) to ask the Minister of Finance:

(1) What was the (a) amount budgeted and (b) total amount spent on the Land Bank Centenary Celebrations in 2012 and, in each case, what was the breakdown specifically for (i) flights, (ii) transport, (iii) food and (iv) accommodation;

(2) how many persons attended the celebrations?
NW1232E

REPLY:

1.a. R 3 950 000.00

1.b. R 2 393 224.21

i. R 341 711.00 (Flights)

ii. R 78 970.07 (Transport)

iii. and iv. R1 972 543.14 (Staff Awards, Venue Hire, Accommodation, Décor, Dinner, Refreshments and Entertainment)

2. 557

Reply received: May 2013

QUESTION NUMBER: 1008 [NW1231E]

DATE OF PUBLICATION: 10 MAY 2013
1008. Mr T W Coetzee (DA) to ask the Minister of Finance:

(1) (a) How many new positions were created within the Land Bank in the (i) 2011-12 and (ii) 2012-13 financial years and (b) in each case, how many were (i) at a provincial level or (ii) within Head Office;

(2) how many persons were retrenched within the Land Bank in the (a) 2011-12 and (b) 2012-13 financial years?
NW1231E

REPLY:

(1) a. (i) 27 new positions, of which 22 positions were from the Banking Operations and the remaining 5 in Support.

(ii) 11 new positions of which 8 positions were from the Banking Operations and the remaining 3 in Support.

b. (i) 30 positions were an extension of Branch Operations (16 Hubs, 2 Workout and Restructuring, 5 Retail Emerging Market, 5 Business and Corporate Banking and 2 Operations).

(ii) 8 positions were based at Head office.

(2) a. No retrenchment during 2011 – 2012.

b. No retrenchments during 2012 – 2013.

Reply received: July 2013

QUESTION NUMBER: 1001 [NW1224E]
DATE OF PUBLICATION: 10 MAY 2013
1001. Mr T D Harris (DA) to ask the Minister of Finance:

Whether (a) he, (b) his Deputy Minister and (c) his Director-General had any communication concerning any aspect of the Gupta family wedding; if so, in each specified case, (i) what is the name of the person who was communicated with, (ii) on what date did the communication take place, (iii) what medium was used for the communication, (iv) what was the purpose of the communication and (v) what was the outcome of the communication?
NW1224E

REPLY:

	(a-c)	(i)	(ii)	(iii)	(iv)	(v)
Minister	Yes	Minister of Finance	11 April 2013	Hand delivered	Wedding Invitation	Declined
Deputy Minister	Yes	Deputy Minister of Finance	11 April 2013	Hand delivered	Wedding invitation	Declined
Director-General	No	n/a	n/a	n/a	n/a	n/a

Reply received: June 2013

QUESTION NUMBER: PQ 957 [NW1180E]
DATE OF PUBLICATION: 10 MAY 2013

Mr T D Harris (DA) to ask the Minister of Finance:

(1) From 1 January 2011, how many applications under the Promotion of Access to Information Act, Act 2 of 2000, were received by (a) the National Treasury and (b) entities reporting to him, and in each case, how many were (i) granted, (ii) refused and (iii) deemed refused under section 27;

(2) from 1 January 2011, how many internal appeals under the Act were received by (a) the National Treasury and (b) entities reporting to him, and in each case, how many were (i) granted, (ii) refused and (iii) deemed refused under section 77(7);

(3) who is the information officer for (a) the National Treasury and (b) each entity reporting to him, and in each case, what are the contact details of the officer?
NW1180E

REPLY:

See Attachment : National Treasury and Entities

Reply received: May 2013

QUESTION NUMBER: 895 [NW1115E]
DATE OF PUBLICATION: 3 MAY 2013
895. Dr C P Mulder (FF Plus) asks the Minister of Finance:†

(1) (a) How many loans South Africa made to Zimbabwe since 2000, (b) what was the amount in each case and (c) what were the conditions in the case of each loan;

(2) whether the Government took any steps against Zimbabwe due to noncompliance of the conditions of the loan; if not, why not; if so, what are the relevant details;

(3) whether the Government took any steps to recover outstanding funds from Zimbabwe; if not, why not; if so, what are the relevant details;

(4) whether noncompliance regarding the loans was considered in granting additional loans; if not, why not; if so, what are the relevant details;

(5) whether any funds on the agreed date of payment were outstanding in each case; if so, what the outstanding amount was in each case?

NW1115E

REPLY

The government of South Africa has not provided any loans to the Government of Zimbabwe since 2000.

Reply received: June 2013

QUESTION NUMBER: 875 [NW1094E]
DATE OF PUBLICATION: 3 MAY 2013
875. Dr S M van Dyk (DA) to ask the Minister of Finance:

What criterion was used in determining how much money the Department of Water and Environmental Affairs would receive for basic water services in the 2013-14 financial year?

NW1094E
REPLY:

As in all areas of expenditure, a wide range of criteria are taken into account. In respect of basic water services, these include the respective roles and responsibilities of the department, its agencies and municipalities, the distribution of needs for water and sanitation services, cost recovery capacity within municipalities and water utilities and implementation capacity of water service entities.

It is important to note that the main allocations on the national budget relevant to the provision of basic water services are not included on the Department of Water Affairs vote. Section 227 of the Constitution of the Republic of South Africa entitles local government to a share of nationally raised revenue to enable it to provide basic services and perform its allocated functions. These include the provision of water services. The Local Government Equitable Share (LGES) allocation provides funding for municipalities to deliver free basic services to poor households and subsidises the cost of administration and other core services for those municipalities that have the least potential to cover these costs from their own revenues.

In addition to the LGES allocations, provision is made in the Water Affairs vote for conditional grants to municipalities for water infrastructure and services, in addition to funding for the national Department's infrastructure management (programme 3) and regional implementation and support (programme 4). The primary considerations taken into account in determining basic water services allocations include infrastructure and service delivery backlog data and poverty data drawn, inter alia, from the 2011 Census.

The considerations that are taken into account in determining the LGES allocations and conditional grants to municipalities are set out in the Explanatory Memorandum to the Division of Revenue Act, which is published on www.treasury.gov.za as Annexure W1 to the 2013 Budget Review.

Reply received: June 2013

QUESTION NUMBER: 807 [NW1020E]
DATE OF PUBLICATION: 26 APRIL 2013
807. Mr T D Harris (DA) to ask the Minister of Finance:

(1) What (a) is the loan amount the Government is considering to lend Zimbabwe, (b) is the motivation for the loan, (c) are the terms of the loan and (d) is the status of the discussion on the loan with the Government of Zimbabwe;

(2) are there any conditions attached to the loan? NW1020E

REPLY
The discussions about the possible financial assistance to Zimbabwe followed the resolution of the Extraordinary Summit of the SADC Heads of State and Government held at the Lozitha Palace, Kingdom of Swaziland, on 30 March 2009, to provide support to Zimbabwe's Short Term Economic Recovery Programme (STERP).

At the Summit, South Africa and other countries pledged to explore a number of possible support measures for Zimbabwe, including:
▪ Budget support grants;
▪ A line of credit; and
▪ Export credit facilities.

In September 2012, the South African Minister of Finance met with his Zimbabwean counterpart, Mr Tendai Biti, to discuss the type of support that South Africa could offer to help alleviate Zimbabwe's fiscal challenges and to stimulate increased liquidity in the domestic financial market.

These discussions included the possibility of the extension of the R500 million credit line, which will be used to stimulate the extension of longer term loans to small-medium size enterprises in Zimbabwe. The facility will be made available at the level of Central Banks with the necessary guarantees and underwriting by the respective Governments. These discussions have not been concluded.

Any request for assistance on financing the forthcoming elections will have to be directed to SADC for SADC to determine how best this request should be addressed.

Reply received: May 2013

QUESTION NUMBER: 757 [NW967E]
DATE OF PUBLICATION: 19 APRIL 2013
757. Mr L S Ngonyama (Cope) to ask the Minister of Finance:

(1) Whether the recent Zimbabwean request for a R920 million loan will be granted despite the reports from pro-democracy movements about the increasing degrees of violence leading to the 2013 elections; if not, why not; if so,

(2) whether he has considered how this will reflect on South Africa's human rights record; if not, why not; if so, what are the relevant details?

NW967E

REPLY

The discussions about the possible financial assistance to Zimbabwe followed the resolution of the Extraordinary Summit of the SADC Heads of State and Government held at the Lozitha Palace, Kingdom of Swaziland, on 30 March 2009, to provide support to Zimbabwe's Short Term Economic Recovery Programme (STERP).

At the Summit, South Africa and other countries pledged to explore a number of possible support measures for Zimbabwe, including:
▪Budget support grants;
▪A line of credit; and
▪Export credit facilities.

In September 2012, the South African Minister of Finance met with his Zimbabwean counterpart, Mr Tendai Biti, to discuss the type of support that South Africa could offer to help alleviate Zimbabwe's fiscal challenges and to stimulate increased liquidity in the domestic financial market.

These discussions included the possibility of the extension of the R500 million credit line, which will be used to stimulate the extension of longer term loans to small-medium size enterprises in Zimbabwe. The facility will be made available at the level of Central Banks with the necessary guarantees and underwriting by the respective Governments. These discussions have not been concluded.

Any request for assistance on financing the forthcoming elections will have to be directed to SADC for SADC to determine how best this request should be addressed.

Reply received: May 2013

QUESTION NUMBER: 753 [NW961E]
DATE OF PUBLICATION: 19 APRIL 2013
753. Mr T D Harris (DA) to ask the Minister of Finance:

(1) Will a certain person (name furnished) remain in his position while his actions are being investigated;

(2) what other complaints has he received regarding the conduct of the specified person;

(3) will he take action against a certain person (name furnished) for his alleged misconduct?

NW961E

REPLY:

(1) Yes.

(2) None.

(3) The outcome of the enquiry will ascertain if any misconduct has been committed. Further steps will be based on the report of the fact-finding committee.

Reply received: May 2013

QUESTION NUMBER: 666 [NW827E]

DATE OF PUBLICATION: 28 MARCH 2013
666. Mr L S Ngonyama (Cope) to ask the Minister of Finance:

(1) Whether he has found that the R9 billion Jobs Fund as announced by the President, in his state of the nation address of 2011 has achieved its intended targets; if not, why not; if so,

(2) whether it is on target towards achieving its intended goal with regard to (a) number of jobs created, (b) amount of money spent and (c) determining whether the investment meets the targeted returns; if not, why not; if so, (i) what type of analysis is the President getting about (aa) the nature of the applications and (bb) the applications meeting the desired employment creation target of 150 000 jobs by 2015 and (ii) what are the further relevant details?
NW827E
REPLY

(1) The Jobs Fund has been designed to overcome barriers to job creation by providing public funding through four "funding windows" – Enterprise Development; Infrastructure Investment; Support for Work Seekers and Institutional Capacity Building. The Jobs Fund operates as a challenge fund it competitively allocates funds to projects that catalyse innovation and investment in activities which directly contribute to sustainable job creation initiatives, as well as long term employment creation. In this way the Jobs Fund programme differs from other government job creation initiatives which primarily focus on the creation of short term jobs.

The fund attracts project applications by issuing an open call for proposals and thereafter competitively assessing the merits of the proposals. The intention is that a number of calls for proposals will be issued over the duration of the Fund (three years have been allocated to successful applicants to implement their projects). The period of implementation for individual projects will range between April 2012- March 2016.

To date the Jobs Fund has completed two funding rounds and as at 31 December 2012, 65 projects have been approved by the Investment Committee for Funding. For the 65 projects to which Funds have been allocated Grantees have projected the following targets.

New permanent jobs (107 753); beneficiaries who have completed internships or training programmes that will be placed in vacant positions (53 994); beneficiaries placed in short term jobs (43 359); beneficiaries that participate in training programmes (109 239). These projections are pressure tested during contracting.

As soon as funds are allocated to projects the DBSA begins the process of contracting with grantees (this includes a final schedule of project deliverables over the life of the project and the budget which tags funds against specific deliverables), only when the contract is signed and grant conditions met will funds be disbursed to the project. Projects are required to report every quarter on the achievement of project milestones and thereafter funds are disbursed against targets achieved.

The 65 projects supported to date are required to meet their project targets over a three year implementation period (April 2012- March 2015). Project implementation usually starts as soon as the contracting has been finalized.

Of the 65 projects to which funds have been allocated 22 of these projects are in implementation and 18 of these have been in implementation for five months (August 2012-December 2012)

The following targets have been set for the 22 projects that are in implementation.

KEY PROGRAMME INDICATORS FOR22 IMPLEMENTING PROJECTS YEAR TO DATE*…………….. OVERALL TARGETS#
	TARGET	ACTUALS	TARGET
Number of new permanent jobs created as a result of the funded initiatives	255	911	35 588
Number of Beneficiaries placed in permanent positions with project partners	2 052	1 115	29 578
Number of new short term jobs as a result of grant funding	581	195	2 933
Number of beneficiaries trained	5 133	4 286	82 893

*This means April 2012 to December 2012

#this means the target over the life of the project which generally translates to 3 years

The lag in the achievement of some of the targets is due to late finalization of contracts and therefore the delayed start in project implementation. As noted above, 18 of the 22 projects in implementation are operational for only 5 months.

The Jobs Fund has a target of 150 000 jobs to be achieved by the end of the program. The number of jobs will continue to grow as more projects enter the implementation phase and as more quality projects are submitted to the Fund. A 3rd funding round has been closed, 601 applications have been received and these are now being assessed.

(2) (a) Yes the Jobs Fund will create 150 000 jobs over the life of the project

(2) (b) R3.34 billion has been allocated to projects and a promised R3.14 billion has been leveraged from project partners.

(2) (c) The following controls have been put in place to ensure that projects deliver as per their contract. Each Grantee is contracted to deliver specific targets, funds are not disbursed if project targets are not met, and projects are required to report on their performance as per their contracted project plan on a quarterly basis.

(2) (c) (i) The Jobs Fund reports progress to the Anti-Poverty Inter Ministerial Committee, this Committee is chaired by the Deputy President.

(2) (c) (i) (aa) The progress report includes information on: The amount of Funds allocated to Projects; the amount of funds leveraged from project partners; a breakdown of the projects per funding window & sector; the distribution of projects between the public sector, private sector and NGOs; the distribution of projects per region;

(2) (c) (i) (bb) Information on the number of jobs projected by grantees and results achieved are reported.

(2) (c) (ii) The Jobs Fund was established in June 2011. Between June 2011 and March 2012 the Fund was established, a first call for proposals was issued, 2651 applications were assessed. A second call for proposals was issued in April 2012 a further 1000 applications were assessed and the Investment Committee has finalised its funding decisions for the second funding round. A third call for proposals was opened in December 2012 it closed on the 15th March 2013 and applications are currently being assessed.

The contracting process is very elaborate. The DBSA and relevant Treasury officials have been directed to significantly ramp up the process and ensure much faster processing of applications and allocations of funds. This is expected to speed up the job creation process.

Reply received: May 2013

QUESTION NUMBER: 625 [NW784E]
DATE OF PUBLICATION: 28 MARCH 2013
625. Mr T D Harris (DA) to ask the Minister of Finance:

(1) How many claims were instituted against the National Treasury (a) in the (i) 2007-08, (ii) 2008-09, (iii) 2009-10, (iv) 2010-11 and (v) 2011-12 financial years and (b) during the period 1 April 2012 up to the latest specified date for which information is available;

(2) in respect of each specified financial year, (a) what amount was claimed, (b) how many claims were (i) finalised in court, (ii) settled out of court and (iii) are still outstanding and (c) what amount has been paid to each plaintiff in each case that was (i) finalised in court and (ii) settled out of court?
NW784E
REPLY:

(1) (a) For purposes of answering the question, the focus will only be on monetary claims. Claims concerning the constitutionality of legislation and the like are therefore excluded.

The number of claims instituted against the National Treasury during the specified financial years is as follows:

(i) 2007/2008	(ii) 2008/2009	(iii) 2009/2010	(iv) 2010/2011	(iv) 2011/2012
4	8	4	14	5

(b) 11

(2) (a) The following amounts were claimed:
2007 / 2008 financial year
R4,039,755.00;
R189,365.00;
R35,335,606.00;
R15,840,000.00

2008 / 2009 financial year
R22,397.46;
R402,569.78;
R178,000.00;
USD103,493.75 plus R62,696.78;
USD603,500.00;
USD24,000.00;
R5,600,000,00;
R334,974.75

2009 / 2010 financial year
R1,000,000.00;
R48,431.94;
R2,400,000.00;
R1,921,222.88

2010 / 2011 financial year
R500,000.00;
R1,138,027.90;
R58,540.00;
R117,962.00;
R74,086.11;
R565,032.32;
R161,080.35;
R171,492,429.69;
USD206,000.00 plus R460,000.00;
R50,000.00;
R4,887,703.00;
R2,151,250.00;
R516,308.04;
R67,327.26

2011 / 2012 financial year
R15,595,640.00;
R760,960.00;
R11,000,000.00;
R7,392,007.00;
R140,900.00

2012 / 2013 financial year
R15,000,000.00;
R656,856.83;
R112,200.00;
R209,606.67;
R14,200.00;
R350,000.00;
R28,274.88;
R9,997,256.75;
R9,820,669.00;
R38,070.00;
R1,394,598.99

(b) In respect of each financial year the following matters were finalised in court, settled out of court or are still outstanding:

Financial year	(i) Finalised in court	(ii) Settled out of court	(iii) Still outstanding
2007/2008	2	2	1
2008/2009	1	3	5
2009/2010	1	1	2
2010/2011	1	2	11
2011/2012	0	1	4
2012/2013	1	3	7

(c) The following amounts were paid to plaintiffs in each case that was finalised in court and settled out of court:

Financial year	(i) Finalised in court	(ii) Settled out of court
2007/2008	R0	R516,549.14
2008/2009	R124,964,722.50 R7,324,557.19	R0
2009/2010	R0	R0
2010/2011	R0	R0
2011/2012	R0	R0
2012/2013	R0	R0

Reply received: May 2013

QUESTION NUMBER: 556 [NW713E]
DATE OF PUBLICATION: 22 MARCH 2013
556. Adv A de W Alberts (FF Plus) to ask the Minister of Finance:†

(1) In light of the fuel levy on 95 octane which has been payable since 2006 and can simply be adjusted, why has the Government decided rather to finance the Gauteng Freeway Improvement Project (GFIP) by way of a toll system;

(2) (a) what is the purpose of Gauteng's provincial fuel levy, (b) where is the revenue deposited and (c) how is it utilised?

NW713E
REPLY:

(1) South Africa's tax system seeks to be fair, equitable, efficient and comprehensive. The tax system is also complemented by non-tax revenues such as user charges, levies, etc. The entire system is designed to ensure that where affordable, users of services and polluters must pay for the goods and services they consume, including any negative costs (externalities) that they generate for society. In addition, no one tax can or should be earmarked for a specific activity in line with good taxation practices. Therefore the reason for not using the general fuel levy or the 95 Octane inland fuel levy to finance freeways in Gauteng is:

▪It approximates the user-pay principle more directly. This is especially the case where a road is (or roads are) required but budget priorities dictate that there might be more important needs elsewhere, given the limited available funds.

▪The toll system also deals more directly and effectively with the challenges of urban traffic congestion, by favouring public transport over private transport. A fuel levy is not as effective in this regard.

The following references support the arguments in favour of a road tolling system.

▪One of the most apparent user fees (or user charges) by governments is that of toll roads. While these roads may have originally been built, in part or full, with the use of tax money, often the maintenance and expansion of the system is paid for using tolls. This is especially the case where enough motorists will use these roads, trading payment for convenience and time. (Source: http://www.wisegeek.com/what-are-user-fees.htm)

▪Tolling is a charge for the use of road space, and provides a means through which road space can be re-allocated in favour of public transport. While road-user charging (tolling) may be a very useful tool to reduce congestion, it may also be used to pay for the construction of a new road. (Source: http://www.nottingham.ac.uk/transportissues/cong_roadcharging.shtm)

(2) (a) There is no such tax as a Gauteng Provincial Levy but I assume that the honourable member is referring to the 95 Octane Inland levy. This levy is imposed as from January 2006 as a means to limit the use of 95 Octane Petrol in inland areas as indicated in the map below. The inland area is extensive; it covers the entire Gauteng, North West, Free State and parts for the Northern Cape, Eastern Cape Limpopo and Mpumalanga.

The levy was introduced due to the limited supply of 95 Octane and given that many vehicles do not require 95 Octane Petrol in inland areas. Therefore motorists should be discouraged to use 95 Octane Petrol if their vehicles do not require it. Price being a very effective way to influence behaviour.

ATTACHMENT: Levy and non Levy Areas

This levy was introduced at 10 cent per litre and has remained unchanged ever since. With inflation the effectiveness of the levy has waned over time and there is a case to increase the levy to retain some of its real value and impact. By December 2005 95 Octane Petrol accounted for more than 40 percent of total petrol sales in the inland regions. This percentage dropped to as low as 6.5 percent in January 2006, just after the introduction in the special 10 cent per litre levy. Since then 95 Octane Petrol as a percentage of total petrol sales in the inland regions has steadily increased to around 22 percent.

Please note that the revenue from this levy is very modest, approximately R133 million in 2011/12, far less than the amount required for Gauteng freeway improvements.

(b) As required by section 213 of the Constitution, all money received by the national government is deposited into the National Revenue Fund, and therefore all revenue received from the fuel levy is deposited into the National Revenue Fund. An Act of Parliament then determines where such revenue is allocated or transferred.

(c) Like most tax revenues it is used to fund general government expenditure. It is not earmarked for a specific expenditure line item.

Reply received: April 2013

QUESTION NUMBER: 488 [NW641E]
DATE OF PUBLICATION: 14 MARCH 2013
PQ 488 Mr N Singh (IFP) asks the Minister of Finance

What is your department doing to align itself with the National Development Plan?

NW641E
REPLY

Government has adopted the National Development Plan (NDP) and all government departments and entities will align their plans with the NDP and the Medium Term Strategic Framework (MTSF) which will be based on the NDP. Similarly the Budget process in government, which is managed by the National Treasury (NT), will also be aligned to the NDP and MTSF. The contents of the Budget Review 2013 reflect this.

The planning process within NT, in terms of its own outputs has also been subject to the process of alignment with the NDP. This process will be taken further later in the year once the MTSF has been developed.

Reply received: April 2013

QUESTION NUMBER: 469 [NW625E]

DATE OF PUBLICATION: 15 MARCH 2013
Ms D Carter (Cope) to ask the Minister of Finance:

What criteria did the National Treasury apply to judge tenders for the last 100 contracts over R500 000?

NW625E
REPLY:

The National Treasury has been applying the criteria that are prescribed in the Preferential Procurement Policy Framework Act, 2000, Act No 5 of 2000 (PPPFA) and its associated Preferential Procurement Regulations in the invitation, evaluation and adjudication of tenders above the value of R500 000.

For tenders above the value of R500 0000 but below the value of R1million the 80/20 preference point system is applied, where 80 points are allocated for price and 20 points for Broad-Based Black Economic Empowerment.

For contracts above the value of R1million the 90/10 preference point system is applied, where 90 points are allocated for price and 10 points for Broad-Based Black Economic Empowerment.

The Preferential Procurement Regulations also make provision for the designation of sectors for local production and content, where only locally produced services, goods or works or locally manufactured goods meet a stipulated minimum threshold for local production and content will be considered.

In such cases it is a pre-qualification criterion that only bids that achieve the minimum threshold for local production and content will be considered.

Reply received: April 2013

QUESTION NUMBER: 460 [NW614E]
DATE OF PUBLICATION: 15 MARCH 2013
460. Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether section 30 of the draft Treasury regulations that was published in the Government Gazette (details furnished) has (a) now been adopted and (b) been implemented in the (i) national, (ii) provincial and (iii) local spheres of government; if not, why not; if so, what are the relevant details?
NW614E
REPLY:

No, section 30 of the draft Treasury Regulations has not yet been adopted. After publication of the draft Treasury Regulations for public comment, several interested parties forwarded their comments to the National Treasury, mostly by the due date of 8 February 2013. These draft Treasury Regulations, which apply to departments, constitutional institutions and public entities, were published for public comment in terms of section 78 of the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999).

The National Treasury is currently evaluating all comments and will effect changes to the draft Treasury Regulations where necessary, including those related to Chapter 30 that pertain to Supply Chain Management for the Delivery and Maintenance of Infrastructure. The final Treasury Regulations will be published in due course and Chapter 30 will be published during April 2013 to take effect on the date of publication.

In respect of municipalities, consideration will be given to publishing Regulations similar to those contained in Chapter 30. This will be done in terms of the Local Government: Municipal Finance Management Act (MFMA), 2003 (Act No. 56 of 2003).

Reply received: April 2013

QUESTION NUMBER: 459 [NW613E]
DATE OF PUBLICATION: 15 MARCH 2013
459. Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether directives have been issued to all government departments at the end of 2012 to make it mandatory for all contracts in 2013 to include provisions for cost overruns and deviations to be appropriately penalised; if not, why not; if so, what are the relevant details?

NW613E
REPLY:

The National Treasury issued a directive during May 2011 to all government departments regulating the expansion of contracts. For Construction related projects, the contract variation/expansion is capped at 20% from the original contract value, while with a non-construction related contruct, the expansion/variation is capped at 15% of the original value.

Any noncompliance within the directives mentioned above is dealt with as a financial misconduct in terms of chapter 4 of the Treasury regulations and chapter 10 of the PFMA.

Furthermore the draft revised National Treasury Regulations of which Supply Chain Management is part of makes provision for Treasuries to take appropriate action in case of misconduct.

Reply received: April 2013

QUESTION NUMBER: 455 [NW608E]
DATE OF PUBLICATION: 15 MARCH 2013
455. Mr N J J van R Koornhof (Cope) to ask the Minister of Finance:

What deadline does he intend to set for the Davies Commission on Tax Review which he announced in his 27 February 2013 Budget speech?

NW608E
REPLY:

I am currently in the process of finalising a Terms of Reference with Justice Dennis Davies which will include agreeing on firmer deadlines with him. The Terms of Reference and deadlines will be made public once they have been finalised.

Reply received: April 2013

QUESTION NUMBER: 394 [NW546E]
DATE OF PUBLICATION: 8 MARCH 2013
Mr M G P Lekota (Cope) to ask the Minister of Finance:

Whether the National Treasury has fully committed itself to achieving a progressively larger primary balance during the annual presentation of the Budget to Parliament each year, commencing from 2013, in order to (a) achieve a progressive reduction in the national debt, (b) increase fiscal space, (c) acquire more positive ratings from rating agencies and (d) leave future generations unencumbered with this generation's spending; if not, why not; if so, what is the (i) (aa) nature and (bb) extent of the commitment to achieve a primary balance each year and (ii) is the percentage of the primary surplus that is being aimed for in this and subsequent financial years to create certainty about the path to debt reduction?

NW546E

Reply:

Government aims to narrow the primary deficit (the difference between non-interest expenditure and revenue) and stabilise the debt-to-GDP ratio over the medium term. Since the Medium Term Budget Policy Statement in October 2012, government has revised its expenditure plans:

▪Spending projections of national departments have been trimmed.

▪The contingency reserve, which caters for unforeseen expenditure and can be used to finance new policy initiatives, has been substantially reduced.

▪Departments were asked to review their spending, and R52.1 billion has been shifted in support of key priorities.

As a result, government's core spending plans are reduced by R10.4 billion over the next three years. Real non-interest expenditure is now projected to grow at an average rate of 2.3 per cent per year over the medium term, down from 2.9 per cent projected in October 2012.

The 2013 fiscal framework narrows the primary deficit on the main budget over the three-year forecast period: 3 per cent of GDP in 2012/13, 2.3 per cent in 2013/14, 1.6 per cent in 2014/15, and 0.9 per cent of GDP in 2015/16. This will ensure that debt stabilises at around 40 per cent of GDP in 2015/16.

Beyond the medium term, rebuilding fiscal space requires government to close the gap between long-term revenue and spending. Over the next year, a tax policy review will assess whether present tax policy is appropriate to support government's objectives, including fiscal sustainability, over the longer term. Expenditure reviews will seek to increase the efficiency of spending and eliminate waste. A Long Term Fiscal Report will review the sustainability of our spending plans over the coming decades.

Taken together, these interventions should allow South Africa to reduce debt, rebuild fiscal space, and ensure that future generations are not unfairly burdened by today's choices. In addition, while credit ratings are determined by host of economic and political factors, these institutional reforms will raise the chances of better future ratings.

Reply received: April 2013

QUESTION NUMBER: PQ 373 [NW520E]

DATE OF PUBLICATION: 8 MARCH 2013
373. Mr T D Harris (DA) to ask the Minister of Finance:

Whether he will provide details of each National Treasury employee on levels 13 to 16 who has (a) resigned, (b) been retrenched, (c) retired or (d) vacated his or her office in the past 12 months including the (i) relevant date and (b) stated reason for the departure; if not, why not; if so, what are the details?
NW520E

REPLY:

The table below depicts the departure of National Treasury employees from level 13 to 16 during the past 12 months:

Salary level	(a),(b),(c) and/or (d)	(ii) Reasons
Level 14	3 employees	1 employee resigned due to other career prospect
		1 employee contract expired
		1 employee retired
Level 13	22 employees	12 employees resigned due to other career prospects
		4 employees resigned due to a higher remuneration offer
		1 employee retired
		1 employee was transferred to another province
		1 employee contract expired
		1 employee passed away
		1 employee resigned due to insufficient progression possibilities
		1 employee resigned due to a spouse transfer

Reply received: March 2013

QUESTION NUMBER: 372 [NW519E]
DATE OF PUBLICATION: 8 MARCH 2013
372. Mr M Swart (DA) to ask the Minister of Finance:

Whether he intends to take steps to ensure that provinces that failed to spend their entire allocation of the Devolution of Property Rates Grant return the funds to the fiscus; if not, why not; if so, (a) what steps and (b) when?
NW519E
REPLY:

Yes.

(a) All unspent funds that were previously allocated as part of the Devolution of Property Rates Grant will be managed in accordance with the provisions of section 21 of the 2012 Division of Revenue Act (Act no. 5 of 2012), which states:

"(1) Despite the provisions of the Public Finance Management Act or the Municipal Finance Management Act relating to roll-overs, any conditional allocation that is, in the case of a province, not spent at the end of a financial year or, in the case of a municipality, at the end of a municipal financial year, reverts to the National Revenue Fund, unless the relevant receiving officer can prove to the satisfaction of the National Treasury that the unspent allocation is committed to identifiable projects"

(b) Every year, the National Treasury issues and implements a detailed technical circular in departments and provinces. This circular outlines the technical and administrative processes that must be followed in respect of section 21 of the Division of Revenue Act (as quoted above). All departments and provinces are obliged to follow this circular. The Auditor-General also audits all departments who receive conditional grants as to how they implemented this circular.

Reply received: April 2013

QUESTION NUMBER: 330 [NW433E]
DATE OF PUBLICATION: 8 MARCH 2013
330. Mr P F Smith (IFP) to ask the Minister of Finance:

(1) What is holding back the implementation of the Treasury proposals that the minimum drawdown on living annuities be lowered from 2,5% to 0%;

(2) if this can be done independently of Treasury's current review on retirement savings?

NW433E

REPLY:

(1) The proposal to lower the minimum drawdown rate on living annuities is part of a broader retirement reform process which is still in the consultation phase. On Budget Day a document was submitted with revised proposals on retirement reform, for further public consultation until the 31st May 2013, after which we will put forward concrete legislative proposals for tabling in Parliament later in 2013. The National Treasury is embarking on a comprehensive and holistic review of all retirement income products, including living annuities. The review will cover various issues, also including and where appropriate, suitable product standards. This approach will limit the risk of unintended consequences and will achieve policy consistency.

(2) No, as indicated above, the National Treasury prefers a comprehensive and holistic approach to ensure consistency in policy and avoid unintended consequences. Therefore, the level of the draw down rate will be considered as part of this holistic and comprehensive review.

Reply received: March 2013

QUESTION NUMBER: 314 [NW519E]
DATE OF PUBLICATION: 8 MARCH 2013
314. Mr G B D Mc Intosh (Cope) to ask the Minister of Finance:

Whether the SA Revenue Service has an inspectorate which visits businesses to ensure compliance with tax laws; if so, (a) how large is the inspectorate and (b) how many persons of each specified nationality have been (i) issued with warnings or (ii) prosecuted in the (aa) 2009-10, (bb) 2010-11 and (cc) 2011-12 financial years?
NW393E

REPLY

SARS has no dedicated inspectorate which focuses on ensuring compliance among businesses. The mandate to promote tax compliance among all taxpayers – including businesses – is shared between a range of SARS divisions and units. This includes the SARS Large Business Centre comprising approximately 500 personnel which focuses on large corporate taxpayers, while small and medium sized businesses are serviced by our branch network. This includes an outreach and education unit of approximately 300 personnel which visits taxpayers (both individual and corporate) to educate them on their tax obligations and responsibilities to promote compliance. This unit last year embarked on a registration campaign for businesses in the informal sector in partnership with other government agencies. This campaign is on-going.

Other divisions within SARS also perform a range of compliance checks on all taxpayer types including officials who perform assurance verifications based on risk assessments; audit; Customs officials who perform compliance verifications and checks (including site visits) in respect of Customs laws; and the Tax and Customs Enforcement Investigations division which pursues criminal investigations.

All persons / business resident / operating a business in South Africa are expected to be tax compliant in terms of the applicable law.

Reply received: March 2013

QUESTION NUMBER: 313 [NW392E]

DATE OF PUBLICATION 01 MARCH 2013
Mr G B D Mc Intosh (Cope) to ask the Minister of Finance:

How many non-South African (a)(i) temporary and (ii) permanent residents, (b) asylum seekers, (c) refugees or (d) legal entities are registered as (aa) taxpayers and (bb) VAT vendors?

NW392E
REPLY:

SARS does not differentiate in respect of the status of taxpayers for any tax type as per the above categorisation. As such SARS is unable to provide this information.

However, any person operating an enterprise which is subject to the tax legislation of South Africa must understand that he / she must be tax compliant. This is clearly not the case.

SARS has been directed to work with the Department of Home Affairs and other agencies to:

a) raise the awareness of all persons operating in South Africa of their tax obligations;
b) that there must be more intensive efforts to register all persons / businesses (including those operated by foreigners) for tax purposes where required by law.

Reply received: May 2013

QUESTION NUMBER: 269 [NW344E]
DATE OF PUBLICATION: 1 MARCH 2013
269. Mr M Swart (DA) to ask the Minister of Finance:

(1) How many of the organisations and/or companies listed in his reply to question 2477 on 5 November 2012 have taken up funds to create jobs through the Jobs Fund administered by the Development Bank of South (–Southern-sic) Africa;

(2) (a) how many actual jobs have so been created in the current financial year and (b) at what average cost per job?
NW344E

REPLY

(1) The fund attracts project applications by issuing an open call for proposals and thereafter competitively assessing the merits of the applications. The intention is that a number of calls for proposals will be issued over the duration of the Fund (three years have been allocated to successful applicants to implement their projects). The period of implementation for individual projects will range between April 2012 - March 2016.

As soon as funds are allocated to projects the DBSA begins the process of contracting with grantees (this includes a final schedule of project deliverables over the life of the project and the budget which tags funds against specific deliverables), only when the contract is signed and grant conditions met will funds be disbursed to the project. Projects are required to report every quarter on the achievement of project milestones and thereafter funds are disbursed against targets achieved.

Of the 41 projects that were listed in the response to PQ 2477 the status is as follows: (note that was the status of approved projects as at September 2012, please see Annexure 2 for the net approved projects)
21 of these projects had been contracted
10 of these projects were in implementation
1 of these projects had withdrawn their application
2 of projects had delayed implementation until preliminary technical assistance activities are completed.
7 of these projects were in the contracting process

(2) (a)

KEY PROGRAMME INDICATORS FOR 22 IMPLEMENTING PROJECTS YEAR TO DATE * OVERALL TARGETS#
	TARGETS	ACTUALS	TARGETS
Number of new permanent jobs created as a result of the funded initiatives	255	911	35 588
Number of Beneficiaries placed in permanent positions with project partners	2 052	1 115	29 578
Number of new short term jobs as a result of grant funding	581	195	2 933
Number of beneficiaries trained	5133	4 286	82 893

* This means April 2013 to December 2012

# this means the target over the life of the project which generally translates to 3 years

(2) (b) As at the end of December 2012 the jobs fund had allocated funds to a cumulative 65 projects. (note many of the newly approved projects are in the contracting phase and not yet in implementation). For 45 of these projects the cost per job is less than R50 000 per job. The figure below provides an indication of the distribution of the cost per job across the 65 projects to which funds have been allocated.

ATTACHMENT: Number of Projects Split by Cst per Job Bracket (Dec 2012)

Reply received: March 2013

QUESTION NUMBER: 254 [NW269E]

DATE OF PUBLICATION: 1 MARCH 2013
254. Adv A de W Alberts (FF Plus) to ask the Minister of Finance:†

Whether he is planning to take any steps to fight corruption from within the fiscus; if not, why not; if so, what steps are being considered?
NW269E

REPLY:
Combating corruption is a high priority. In the budget speech of 2013, I announced that the process of setting up the Office of the Chief Procurement Officer has begun with earnest. National Treasury has seconded one of its Deputy Directors-General to act as an interim Chief Procurement Officer (CPO).

The first task of the CPO is to implement four main streams of work:

· Taking remedial actions in areas of failure

· To take urgent steps to improve the current system

· To standardise the procurement of critical items across all government, and

· Develop and implement a long term modernisation strategy of the entire system.

When I tabled the 2013 Budget, I also indicated that this is not going to be an easy task and we will need all South Africans to work together to ensure that wastage, inefficiencies and corruption is eradicated from the system.

In line with this approach it is vital that more is done:

a) by the business community to change the culture of extraction and abuse of the government procurement system which means that a few businesses gain at the expense of the taxpayers;

b) among and by citizens to treat individuals who had ostentations lifestyles as a result of the benefits of corrupt practices. The culture of corruption must be challenged and contested by all social actors. Only a combined effort by all South Africans can help to push back corruption.

Reply received: March 2013

QUESTION NUMBER 250 [NW268E]
DATE OF PUBLICATION: 22 FEBRUARY 2013
Adv A de W Alberts (FF Plus) to ask the Minister of Finance:

How many Members of Parliament of each specified party have been audited by the SA Revenue Service (Sars) in the (a) 2011-12 and (b) 2012-13 financial years?
NW268E

REPLY:
SARS unfortunately does not keep records of taxpayers according to their party political affiliation. In terms of the Constitution, South Africans are free to make certain choices regarding basic rights such as the right to belong to a particular political party. SARS has no interest in such information and therefore no records are kept in relation to such choices.

SARS does, however, render a specific service to Members of Parliament in general and for that reason it has a dedicated unit in Cape Town to assist Members of Parliament. It also provides dedicated services to Members of Parliament via its VIP Office in Pretoria.

The SARS compliance system is based on the most modern tax administration model which relies on people willingly and voluntarily doing the right thing. The majority of our citizens are willing and eager to comply. SARS's compliance strategy accommodates them and makes it easy for them to fulfil their obligations. However, those who choose not to comply face the full force of the law. Audits are intended to increase revenue collection and improve compliance with tax and customs legislation pursuant to SARS legislative mandate and strategic objectives.

As part of the risk-based approach used by SARS to identify and investigate non-compliance with tax and customs laws, risk-profiling is applied to all tax payers and across all tax types or tax products. As part of the risk-profiling of individual taxpayers, SARS uses a variety of sources of information including third party data and risk rules which assist in identifying potential discrepancies between the income and assets declared by taxpayers and their actual income and assets. Where such a potential discrepancy is identified, a taxpayer's declaration is selected for further review.

Reply received: March 2013

QUESTION NUMBER PQ 184 [NW193E]

DATE OF PUBLICATION 01 March 2013
184. Mr P F Smith (IFP) to ask the Minister of Finance:

1) How are taxi owners assessed for income tax;

2) whether he has found that taxi owners are paying their income tax; if not, what steps does he intend to take to remedy the problem; if so, what are the relevant details?

NW193E
Reply

1) Taxi owners are assessed for income tax like any other taxpayer – either as a sole proprietor where they operate taxis under their own name or as an incorporated entity if they are registered as such. Further, if a taxi owner employs another person as the driver, they would be liable for employment tax. In any of these cases they must comply with the general rules under tax law. That is, they have to register as taxpayers, submit returns when required to, declare their income and expenses accurately and pay on time.

2) While there is no special dispensation for the taxi industry under tax law, the SARS compliance strategy relies on segmenting taxpayers according to the nature of their commercial activity and the potential tax risk they may pose. The SARS Compliance Programme launched in 2012 recognised small businesses whose transactions are based largely on cash as posing a special kind of risk and proposes a tailored approach to them. Generally, compliance levels within cash-based small business are low. The taxi industry is a subset of this segment and its level of compliance is consistent with the rest of the segment. SARS's actions to encourage compliance include enforcement, service and education. With regards to small business, SARS's focus is primarily on drawing them into the tax fold by improving levels of registration and making them aware of their obligation through educational programmes. Where it is determined that a taxpayer is not compliant, the nature of the action that SARS may undertake depends on and is proportional to the taxpayer's behaviour.

Reply received: March 2013

QUESTION NUMBER: 98 [NW104E]

DATE OF PUBLICATION: 14 February 2013

98. Dr D T George (DA) to ask the Minister of Finance:

(1) Whether (a) the National Treasury and (b) any entities reporting to it paid any bonuses to senior officials in December 2012; if so, in each specified case, (i) to whom and (ii) what amount was paid;

(2) whether the specified bonuses were performance-based; if not, what is the justification for each bonus; if so, in each case, from which budget were the performance bonuses paid;

(3) whether, in each case, (a) a performance agreement was signed with the official and (b) regular performance assessments were conducted; if not, why not, in each case; if so, what are the relevant details in each case?

NW104E
REPLY

1)(a)(b) National Treasury and Entities	(1)(i) Bonuses to senior officials in December 2012?		(1)(ii) What amount?	2) Whether specified bonuses were performance-based, and from which budget were bonuses paid?	(3)(a) Was performance agreement signed?	(3)(b) Were regular performance assessments conducted?
National Treasury	None		N/A	N/A	N/A	N/A
Accounting Standards Board	None		N/A	N/A	N/A	N/A
Co-operative Banks Development Agency	None		N/A	N/A	N/A	N/A
Development Bank of Southern Africa	None		N/A	N/A	N/A	N/A
Financial Intelligence Centre	None		N/A	N/A	N/A	N/A
Financial Services Board	8 Senior officials		R2 939 234.75	Performance base from operational budget	Yes	Yes
Government Pension Administrative Agency	None		N/A	N/A	N/A	N/A
Independent Regulatory Board for Auditors	5 senior officials		R718 000.00	Performance base from Incentive bonus budget	Yes
Pension Funds Adjudicator	None	N/A		N/A	N/A	N/A
Land Bank	None	N/A		N/A	N/A	N/A
Office of the Ombud for Financial Services Providers	5 senior officials	R827 197.95		Performance base from FAISO Ombud salary budget	Yes	Yes
Public Investments Corporation	None	N/A		N/A	N/A	N/A
South African Revenue Services	1 Group executive	R371 204.00		Performance base from Performance Incentive budget	Yes	Yes
SASRIA	5 executive managers	R516 376.36		Performance base from salary budget	Yes	Yes

Reply received: March 2013

QUESTION NUMBER: 65 [NW71E]
DATE OF PUBLICATION: 14 February 2013
Mr E H Eloff (DA) to ask the Minister of Finance:

(a) How many tickets did (i) the National Treasury and (ii) any of its entities purchase to attend business breakfasts hosted by a certain newspaper (name furnished) (aa) in the (aaa) 2010-11 and (bbb) 2011-12 financial years and (bb) during the period 1 April 2012 up to the latest specified date for which information is available and (b) what was the total cost in each case?

NW71E
Reply:

ENTITIES (a) (i) (ii)	Number of tickets	(aaa) 2010-11	(bbb) 2011-12	(bb) 1 April 2012 to date	(b) Total cost
National Treasury	0	N/A	N/A
Accounting Standards Board	0	N/A	N/A
Co-operative Banks Development Agency	0	N/A	N/A	N/A	N/A
Development Bank of Southern Africa	0	N/A	N/A	N/A	N/A
Financial Intelligence Centre	0	N/A	N/A	N/A	N/A
Financial Services Board	0	N/A	N/A	N/A	N/A
Government Pension Administrative Agency	0	N/A	N/A	N/A	N/A
Independent Regulatory Board for Auditors	0	N/A	N/A	N/A	N/A
Pension Funds Adjudicator	0	N/A	N/A	N/A	N/A
Land Bank	2	N/A	N/A	R1584.60 (VAT incl.)	R1584.60 (VAT incl.)
Office of the Ombud for Financial Services Providers	0	N/A	N/A	N/A	N/A
Public Investments Corporation	0	N/A	N/A	N/A	N/A
South African Revenue Services	0	N/A	N/A	N/A	N/A
SASRIA	2	N/A	N/A	R1584.60 (VAT incl.)	R1584.60 (VAT incl.)

QUESTION NUMBER: 20 [NW22E]
DATE OF PUBLICATION: 14 February 2013
Mr T D Harris (DA) to ask the Minister of Finance:

Whether the Public Investment Corporation (PIC) purchased any shares in a certain financial entity (name furnished) from certain investment company (name furnished); if not, how was this conclusion reached; if so, (a) how was the deal structured, (b) who authorised the deal and (c) what (i) was the motivation for the transaction and (ii) is the current status of the transaction?

NW22E
REPLY:

The Public Investment Corporation (PIC) did purchase shares of a certain financial entity (name furnished) from certain investment company (name furnished).

(a) The deal was structured as an equity purchase that went through the JSE. A total of 5,284,735 (cum dividend) shares in the 'financial entity' were purchased from the 'investment company' by PIC listed equities on 29 February 2012 for a purchase price of R156.11 per share. At close of trading on 28 February 2012, the 'financial entity' traded at R183.50 with a VWAP of R183.15. As such, the acquisition price represented a 14.76% discount to market.

(b) The deal was a purchase of listed equity and as such it was authorised by the Chief Investment Officer of the PIC in line with the PIC's Delegation of Authority.

(c)(i) The shares were purchased at a price of R156.11 (cum dividend). At close of trading on 28 February 2012, the 'financial entity' traded at R183.50 with a VWAP of R183.15. As such, the acquisition price represented a 14.76% discount to market. From a commercial perspective, based on the discount to market value and the PIC house view of the value of the 'financial institution' (at the time PIC listed equities had a 12 month target price of R216.24), the returns from the acquisition were attractive.
(c)(ii) To date the PIC has generated an internal rate of return of 26.52% for the GEPF on the 'financial entity' share appreciation alone (excluding dividends received). The shares are currently being warehoused by PIC listed equities and the PIC Isibaya Fund is working to establish a BBBEE vehicle to benefit GEPF members who will ultimately acquire these shares. The PIC has appointed Empowerdex to advise on the structuring of this vehicle to comply with the BBBEE Codes of Good practice and are in the process of engaging service providers to administer this vehicle.

Reply received: March 2013

QUESTION NUMBER PQ 5 [NW6E]
DATE OF PUBLICATION: 28 FEBRUARY 2013
Mr P F Smith (IFP) to ask the Minister of Finance:

(1) Whether shopkeepers are legally required to issue receipts to customers; if not, what is the position in this regard; if so, what are the relevant details;

(2) whether he has been informed of complaints in the media indicating that many vendors do not issue receipts; if not, what is the position in this regard; if so, what are the relevant details;

(3) whether his department has calculated the tax revenue lost to the fiscus because of this practice; if not, what is the position in this regard; if so, what is the amount;

(4) what steps does he intend to take to combat this contravention?

NW6E

REPLY:

(1) Receipts are issued to provide evidence that goods have been received or payment has been made. In terms of common law, a purchaser has the right to demand a receipt as evidence that payment for goods or services has been made. In terms of section 26 of the Consumer Protection Act, 2008, a supplier of goods or services is obliged to provide a written record of transactions to a consumer, unless the goods or services have been exempt from this requirement.

In terms of the Value-Added Tax Act, 1991, registered VAT vendor is obliged to issue a tax invoice in respect of supplies. Such tax invoices must comply with the specifications outlined in section 20 of the VAT Act.

It is important to distinguish between shopkeepers who are registered VAT vendors and as such required to issue valid tax invoice and those who are not. Shopkeepers who are not registered VAT vendors are not required to issue a tax invoice. Companies or individuals who supply goods and services are only required by law to register for VAT where their annual turnover (or expected turnover) is above R1 million per year. Where turnover is between R50 000 and R1 million a year, VAT registration is voluntary and under R50 000 VAT registration is only permitted in very limited circumstances.

(2) SARS is aware of incidents where registered VAT vendors fail to issue tax invoices and, where reported to SARS, these incidents are investigated. SARS provides an online facility to allow any person to verify whether any company or individual is registered for VAT and whether a VAT number is valid.

(3) Tax revenue would only be lost where a supplier is liable for tax and a supply is not accounted for to SARS. The Tax Administration Act, 2011, requires that taxpayers keep records to enable them to observe the requirements of tax legislation. Even if receipts are not issued in all cases this requirement maybe met by other records. The act of not issuing a receipt on its own does not necessarily indicate a loss of revenue and no qualification of revenue lost as a result of not issuing receipts is available.

(4) SARS conducts a variety of compliance checks and initiatives with respect to VAT, Income Tax and other taxes. These include a variety of tests for tax legislation, subjecting tax declarations to risk assessments and other compliance measures, and comprehensive audits and investigations where required. SARS also conducts a variety of spot checks on premises where a person is suspected of non-compliance. One of the seven priority areas identified by SARS for special attention over the next five in its Compliance Programme is the informal economy.

To the extent that anyone believes that a person is acting in contravention of any tax or customs law that person is encouraged to file a suspicious activity report on www.sars.gov.za or can call the SARS Anti-Corruption and Fraud hotline on 0800 00 2870.