Category: Government Opinion Pieces

National Treasury has promulgated a raft of tax laws following proposals outlined by Finance Minister, Enoch Godongwana, during the 2022 Budget Speech.

This includes the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2022, (Act No. 19 of 2022) (2022 Rates Act); Taxation Laws Amendment Act, 2022 (Act No 20 of 2022) (2022 TLAA) and Tax Administration Laws Amendment Act, 2022 (Act No. 16 of 2022) (2022 TALAA).

These were promulgated on 5 January 2023.

In a statement, Treasury said the Acts give legislative effect to the tax proposals, as outlined by the Minister of Finance in his annual National Budget Speech delivered on 23 February 2022.

“The 2022 Rates Act gives effect to changes in rates and monetary thresholds and increases of the excise duties on alcohol and tobacco. It also contains changes tabled by the Minister in Parliament on 31 March 2022 and 31 May 2022 regarding temporary relief on the fuel levy, as well as the postponement of the effective date of an increase in the health promotion levy.

“The 2022 TLAA contains more complex, technical and anti-avoidance legislative changes. It also contains changes to the carbon tax rate trajectory, extension of the first phase of the carbon tax as well as an excise duty rate for both nicotine and non-nicotine vaping solutions,” said Treasury said.

It said the 2022 TALAA deals with tax proposals that are technical and administrative in nature.

A Final Response Document on the 2022 legislative pieces, as well as the Explanatory Memorandum to the 2022 TLAB (Explanatory Memorandum) and the Memorandum of Objects to the 2022 TALAB (Memorandum of Objects), were also published.

Treasury said the Final Response Document updates the Draft Response Document to consider submissions and decisions made following further inputs by stakeholders, the Standing Committee on Finance and the Select Committee on Finance during public hearings regarding the 2022 Draft Rates Bill, 2022 Draft TLAB and 2022 Draft TALAB.

The 2022 Rates Act, 2022 TLAA, 2022 TALAA, Final Response Document, Explanatory Memorandum and Memorandum of Objects can be found on the National Treasury (www.treasury.gov.za) and SARS (www.sars.gov.za) websites.

The Presidency and National Treasury have released a progress report on the implementation of economic reforms to mark two years since the establishment of Operation Vulindlela.

Operation Vulindlela was established in October 2020 as a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms.

“By fostering collaboration and coordination across government in support of the reform agenda, Operation Vulindlela has achieved significant progress in a short space of time,” said the Presidency.

The report published by the Presidency on Wednesday provides a detailed update on progress in the implementation of priority reforms in the electricity, transport, water and telecommunications sectors as well as reforms to the visa regime.

The full report can be downloaded at https://www.stateofthenation.gov.za/operation-vulindlela.

It highlights the following key achievements to date:

– Paving the way for private investment in electricity generation for the first time, with reforms underway to establish a competitive electricity market.

– Clearing the backlog of water use licenses and re-engineered the license application system, unlocking billions of Rands in investment.

– Ending a more than ten-year delay in the auction of high-demand spectrum, enabling substantial new investment in telecommunications.

– Facilitating the introduction of private sector participation in container terminals, to crowd in investment and improve the efficiency of port operations.

– Undertaking a comprehensive review of the work visa system, with recommendations to overhaul the work visa system and attract skills and investment.

– Published a new Critical Skills List for the first time since 2014, with new occupations in IT and other sectors with a need for skills.

– Adopted a new National Rail Policy to guide the modernization and reform of the rail sector, including the introduction of third-party access to the rail network.

– Developing and/or passing legislation to create a transport economic regulator, reform the electricity sector, and establish a National Water Resources Infrastructure Agency.

The Presidency said the report also provides details on new reforms which have been prioritised by Operation Vulindlela to drive inclusive economic growth, including creating an enabling legislative framework for hemp and cannabis, developing a devolution strategy for passenger rail, and addressing the backlog of title deeds for subsidised housing.

Higher Education, Science and Innovation Minister, Dr Blade Nzimande has welcomed a new agreement between South Africa and Italy, that will see basic and computational sciences development in South Africa.

This follows the signing of a Memorandum of Understating (MoU) between South Africa’s National Institute of Theoretical Physics (NITheCS) and Triste’s Abdus Salam International Centre for Theoretical Physics (ICTP) on the sidelines of the World Science Forum in Cape Town last week.

NITheCS Director, Prof Francesco Petruccione and ICTP Director, Prof Atish Dabholkar, signed the agreement in the presence of Nzimande.

Nzimande believes that the partnership will not only provide important support for basic science in South Africa but also serve as a model for future international collaborations in the field.

The agreement will see the two institutes working together on a range of initiatives, including the development of theoretical and computational research and education in South Africa, and the exchange of scientists and students between the two countries.

“We are thrilled to be partnering with NITheCS to support the growth of theoretical physics in South Africa,” said Dabholkar.

“This collaboration will provide valuable international opportunities for South African scientists and students and those at ICTP to work together and advance their research,” he added.

The department said the MoU is a significant step forward in the relationship between ICTP and NITheCS.

“It will have a positive impact on the development of theoretical and computational sciences in South Africa and Africa,” noted Petruccione.

The NITheCS provides a platform for research, training and engagement in theoretical physics, astronomy and astrophysics, data science, mathematics, statistics, quantitative finance, bioinformatics and quantitative biology, earth systems modelling and climate change modelling.

According to Dabholkar, ICTP is a unique institution that explores fundamental scientific questions at the highest level, promotes active engagement with scientists in developing countries, and advances international cooperation through science.

“Scientists there conduct rigorous excellent, curiosity-driven research in frontier and interdisciplinary science ranging from string theory, cosmology, and black holes to quantum computing, climate science, and quantitative life sciences.”

To learn more about these institutions, please visit www.nithecs.ac.za and www.ictp.it.

The Department of Social Development will today launch the Expert Panel Report on Basic Income Support in Kempton Park, Gauteng.

Experts and participants are expected to deliberate on the findings and the recommendations of the report.

The research on the Expert Panel Report was commissioned by the department, in collaboration with the International Labour Organisation (ILO).

Among key thematic areas for discussion by the panel members are the social outcomes of the Social Relief of Distress grant, and its economic and fiscal considerations.

The department has highlighted that poverty, inequality and unemployment continue to rise due to the current unfavourable economic climate, which is informed by, among others, the recent COVID-19 pandemic, which negatively affected the country and the world.

“As the triple challenge [of poverty, unemployment and inequality] persists, it is widely accepted that social protection is an important component of development, for both human and economic development.

“The rising rate of unemployment, together with the high uptake of the COVID-19 Social Relief of Distress (SRD) grant, are evidence that there is a gap in the provision of social protection for the working age group of 18 to 59 years.

“This necessitated the Department of Social Development to conduct studies to inform a proposal to extend social assistance for this vulnerable group,” the department said in a statement.

The department said the panel report affirms that income poverty in South Africa is extremely pervasive. More than half of households live in poverty, and the COVID-19 SRD is critical to sustain their livelihoods.

Furthermore, the department said the impact of the SRD on poverty and inequality is potentially more significant than previously understood. This is despite the relatively modest nature of the temporary relief.

At the end of the panel’s programme, it is expected that the report will be handed over to the Department of Social Development by the International Labour Organisation.

Gauteng MEC for Transport and Logistics, Kedibone Diale-Tlabela, has vowed to intervene and fast track the completion of provincial road construction projects that have been experiencing delays due to various factors.

On Monday, the MEC went on a fact-finding oversight visit to various road construction sites to assess construction progress as well as to get first-hand information on issues hampering the completion of the projects.

These include the K69 (Solomon Mahlangu Road) and K54 (Tsamaya Road), both in Mamelodi.

Diale-Tlabela said that the department can no longer allow further delays in the delivery of road infrastructure as this has a huge bearing on the movement of goods and people.

“Gauteng is one of the major contributors to the country’s economic growth and our department plays a major role in ensuring ease of mobility in the province, which is at the core of efforts for economic recovery.

“While we continue to invest in construction and upgrades of our provincial roads’ infrastructure, especially in our townships, project abandonment, delays and disruptions remain a thorny issue for us. We would like to assure the people of Gauteng that these projects are receiving our attention and intervention,” the MEC said.

The K69 road construction project, which is being upgraded into a dual carriageway, has been experiencing delays due to encroachments on the road reserve and community protests.

The K54 road project involves the upgrading and doubling of the existing single carriageway to increase capacity, safety and accessibility for existing and future developments along the Solomon Mahlangu Road.

The project was started in 2018 and was expected to be completed by April 2022. However, due to the encroachment of the road reserve, the contractor could not access the road to proceed with construction work.

Diale-Tlabela emphasised that the department is committed to delivering quality road infrastructure in support of the province’s elevated priorities.

“Ours is a people-centred economic recovery focused on improving road infrastructure to facilitate smart and convenient and movement of people and goods in the province. Project stoppages have a negative impact on our economic growth and result in untold inconveniences to road users.

“We will continue with our interventions to ensure that road construction projects are delivered without further delays, at the right quality and within budget,” the MEC said.

National Treasury says it continues to engage with the Department of Public Enterprises and Eskom with the aim of identifying solutions to the purchase of diesel.

On Thursday, the Treasury said it had noted the recent public interest and media queries requesting clarity about discussions to assist Eskom with the purchase of diesel.

In a statement on Thursday, it said: “The staggered nature of the budget process, which allows for the necessary legislative and executive oversight as well as for well-informed planning about how to allocate the country’s scarce financial resources, makes it difficult to consider and accommodate any ad hoc funding requests outside of this process, especially large requests that are made at short notice.

“The budget process allows for government departments and state-owned entities to follow a set process to submit their funding requests to be considered for inclusion in the Budget, which is then approved by Parliament.”

Treasury said Eskom did not apply for funding through the budget process and Eskom management should therefore take all necessary steps to ensure they secure the diesel needed to avert severe load shedding.

“That said, the National Treasury and the Minister of Finance are acutely aware of the impact that Eskom’s diesel shortages may have on already severe levels of load shedding,” it said.

The KwaZulu-Natal Executive Council has established a technical committee to focus on the debt owed by government to municipalities.

In a statement issued on Thursday following a Provincial Executive Council meeting held this week, Premier Nomusa Dube-Ncube said the debt owed is reported at R2.8 billion and includes an amount of R420 million owed by the Ingonyama Trust Board, inter-municipal debt of R380 million, national government departments at R400 million, and Transnet’s R208 million, among others.

“The committee will explore all options available to ensure that each and every department in the province and nationally meet their rates and services obligations to municipalities,” Dube-Ncube said.

While the council welcomed that all departments are paying their consumption bills for services on time, the Premier said the provincial government is concerned about the arrears and the fluidity of the debt owed to municipalities, especially property rates.

“The provincial government has called on municipalities to provide credible billing by cleansing data and updating systems as well as to improve mechanisms to resolve disputes speedily including using inter-governmental relations processes.

“The EXCO has resolved that all departments budget and take responsibility for the payment of municipal services from their baseline budgets. The EXCO will receive regular update from the committee,” Dube-Ncube said.

District Development Model implementation

The Premier also announced that the Council has conducted an assessment of the District Development Model implementation.

The District Development Model was developed to improve coherence in planning and budgeting, which often results in poor service delivery and limited development impact in communities.

“The Provincial Government of KwaZulu-Natal noted that the province is well on target to ensure that the long-term district/metro one plan-one budget programmes are finalised,” Dube-Ncube said.

EXCO has approved that the District Development Agencies be brought on board to lead on the economic growth side in line with their mandate of attracting investments and packaging credible catalytic projects to stimulate sustainable economic growth.

“The provincial government acknowledged the need to enhance institutional capacity at district level in order to realise the accelerated implementation of the one plan/one budget for each district. The Department of Cooperative Governance and Traditional Affairs (COGTA) has been tasked to give more impetus in mobilising stakeholder to accelerate the implementation of the District Development Model and translate it into practical service delivery impact in communities,” Dube-Ncube said.

Water War Room

Meanwhile, while commending the establishment of Water War Rooms in all districts, the Executive Council raised its concerns about the poor participation and commitment of some districts in the structures tasked to ensure that people get water daily.

“EXCO has approved the establishment of the Provincial Water War Room which will attend to key water issues in districts and bring strategic support and interventions.”

The Criminal Law (Sexual Offences and Related Matters) Amendment Bill of 2022, which seeks to decriminalise sex work, has been published and is now open for public comment.

The bill proposes the repealing of the Sexual Offences Act (previously Immorality Act), 1957 (Act No. 23 of 1957) and Section 11 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act, 2007 (Act No. 32 of 2007) to decriminalise the sale and purchase of the adult sexual service.

Justice and Constitutional Development Minister, Ronald Lamola – who addressed media on progress on the bill on Friday – explained that the proposals of the bill are a response to Pillar 3 of government’s National Strategic Plan (NSP) on Gender-Based Violence and Femicide.

“Pillar 3 of the National Strategic Plan… contains a list of key interventions, key activities and indicators. One of the key activities under Pillar 3 is the finalisation of the legislative process to decriminalise sex work.

“This follows the view that the ongoing criminalisation of sex work contributes to GBVF, as it leaves sex workers unprotected by the law, unable to exercise their rights as citizens and open to abuse generally, not least when they approach State facilities for assistance,” Lamola said.

The Minister emphasised that although current legislation and municipal by-laws continue to criminalise the adult practice, this has not “stopped the selling or buying of sex, nor has it been effective”.

“If anything, [criminalisation] has led to higher levels of violence against sex workers. In addition, criminalisation affects predominantly women, with the female sex worker usually being the one who is confronted by law enforcement, but the male client isn’t. The National Prosecuting Authority has also indicated a very low percentage of cases or prosecutions for such transgressions,” he said.

As explained by Lamola, the bill has clauses that seek to:

• Repeal the Sexual Offences Act, 1957 and section 11 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act, 2007.
• Deal with the expungement of criminal records of persons convicted of, engaged in, rendering or receiving sexual services from persons 18 years or older.
• Handle the transitional provisions pertaining to criminal proceedings relating to sexual services rendered or received by persons 18 years or older, which were instituted prior to the commencement of this Act.

“It is hoped that decriminalisation will minimise human rights violations against sex workers. It would also mean better access to health care and reproductive health services for sex workers, as well as compliance with health and safety and labour legislation. It would also afford better protection for sex workers, better working conditions and less discrimination and stigma,” Lamola said.

Regulation

Lamola told the briefing that the bill will follow a “two-step approach”, with decriminalisation preceding regulation of the industry.

“It [is] important to deal with decriminalisation first, so as to ensure that sex workers are no longer criminally charged. This will mean greater protection for sex workers. Decriminalisation will destigmatise sex work and enable access to basic services and protection by law enforcement agencies. Existing laws prohibiting children from selling sex and trafficking for sexual purposes remain in force.

“With regards to regulation, municipal by-laws would still be able to provide where solicitation in public spaces may or may not take place, for example, prohibiting the selling of sex in certain areas. This is similar to the prohibition on the location of taverns and shebeens, where there can be restrictions imposed to prohibit trade in residential neighbourhoods, near schools and/or religious buildings,” he explained.

Public comments on the bill can be sent on or before 31 January 2023 to the department’s Chief Directorate: Legislative Development in the following ways:

• Comments via post can be addressed to: The Director-General: Justice and Constitutional Development, Private Bag X 81, Pretoria, 0001. Marked for the attention of Tsietsi Sebelemetja.
• Comments can be e-mailed to Bills1@justice.gov.za.
• They can be faxed to 012 406 4632.

A copy of the bill can be accessed at www.justice.gov.za.

The Civilian Secretariat for Police Service has called on the public to submit comments on the Independent Police Investigative Directorate (IPID) Amendment Bill.

“The IPID Amendment Bill of 2022 proposes the entrenchment of the institutional and operational independence of IPID, making it clear that IPID must be impartial and must exercise its powers and functions without fear, favour or prejudice,” the Secretariat said in a statement.

It said this was in order to give effect to the “McBride judgement” where Judge Bosielo made certain pronouncements concerning the importance of the independence of IPID, in order for IPID to function independently.

The Constitutional Court declared as invalid certain provisions of the Independent Police Investigative Directorate Act, which authorised the Minister of Police to suspend the Executive Director, to take disciplinary steps against the Executive Director following suspension, and to remove the Executive Director from office.

The Constitutional Court then ordered Parliament to address the defects in the legislation.

The Bill also proposes a more transparent and open process for the appointment of the Executive Director and also a detailed and thorough process for integrity testing of IPID officials.

The Bill further provides for the amendment of other provisions of the Principal Act, so as to ensure that IPID executes its mandate effectively and efficiently.

The draft Bill can be found at www.policesecretariat.gov.za.

Members of the public are invited to submit their comments on or before 15 January 2022. The comments can be submitted via email to comments.IpidBill@csp.gov.za or via post for attention of Mr. M Ntwana at Civilian Secretariat for Police Service, Private Bag X922, Pretoria, 0001.

Comments can also be hand-delivered at the Civilian Secretariat for Police Service, Fedsure Forum Building, 2nd Floor, Corner of Pretorius and Lilian Ngoyi Streets, Pretoria.

General enquiries regarding the draft bill can be submitted to Mr Jacob Setouto via Jacob.Setouto@csp.gov.za.

The National Council of Provinces (NCOP) passed five money bills on Tuesday during its hybrid plenary sitting.

The five bills passed include the Rates and Monetary Amounts and Amendment of Revenue Laws Bill, the Taxation Laws Amendment Bill, the Tax Administration Laws Amendment Bill, the Adjustments Appropriation Bill and the Special Appropriation Bill.

This comes after Finance Minister Enoch Godongwana last month formally tabled the 2022 Rates and Monetary Amounts and Amendment of Revenue Laws Bill (Rates Bill).

Parliament, in a statement, said the major objectives of the Rates and Monetary Amounts and Amendment of Revenue Laws Bill and the Taxation Laws Amendment Bill are largely aimed at:

– fixing the rates of normal tax;

– to amend the Income Tax Act (ITA), of 1962;

– to amend rates of tax and monetary amounts;

– to amend the Customs and Excise Act, of 1964;

– to amend rates of duty in Schedule 1 to that Act;

– to insert new tariff items;

– to delete tariff items;

– to delete rebate items;

– to insert rebate items;

– to amend the Carbon Tax Act (CTA), of 2019;

– to amend a rate of tax; and

– to amend the Rates and Monetary Amounts and Amendment of Revenue Laws Act, of 2020, among the key others.

“The key proposals in the Tax Administration Laws Amendment Bill include the imposition of understatement penalty for employment tax incentives improperly claimed, advance rulings under the Customs and Excise Act, and addressing tax compliance status system abuse,” said Parliament spokesperson Moloto Mothapo.

He said the Adjustments Appropriation Bill and the Special Appropriations Bill, on the other hand, were tabled in Parliament in terms of section 12(1) and (2) of the Money Bills and Related Matters Act as amended by the Money Bills Amendment Procedure and Related Matters Amendment Act.

“Section 12(1) of the Money Bills and Related Matters Act requires the Minister of Finance to table a national adjustments budget as envisaged in section 30 of the Public Finance Management Act. Section 12(2) of the Money Bills and Related Matters Act requires that ‘an adjustments appropriation Bill must be tabled with a national adjustments budget’,” he said.

The Adjustments Appropriation Bill provides for increases to allocations set out in the main Appropriation Act of 2022.

Total in-year spending adjustments amount to R13 billion, inclusive of the total adjusted appropriations per vote and adjusted estimates of direct charges against the National Revenue Fund (NRF). Of the total in-year adjustments of R13 billion, R7.24 billion is with respect to direct charges against the NRF.

These include, among others,

– a proposed additional allocation of R5.93 billion towards debt service costs;

– a proposed additional allocation of R48.5 million as unforeseeable and unavoidable expenditure through the Provincial Equitable Share for provincial Social Development departments for the continuation of care and protection of flood victims who were placed in shelters in KwaZulu-Natal;

– a proposed additional allocation of R306.26 million for State Owned Companies (SOEs): Denel R204.7 million and Land and Agricultural Development Bank R101.56 million; and

– a proposed additional allocation of R618.82 million for the skills levy and sector education and training authorities (SETAs).

The Special Appropriations Bill, on the other hand, proposes to Parliament to appropriate additional funds in the 2022/23 financial year for the requirements of the Vote (10) of Public Enterprises and Vote (40) Transport and to provide for matters connected therewith. This proposed additional funding is allocated to three State Owned Companies located across the Public Enterprises and Transport Votes, namely, Transnet SOC Limited (Transnet), Denel SOC Limited (Denel); and South African National Roads Agency SOC Limited (Sanral). The Bill proposes that R6, 278 billion and R23, 736 billion be appropriated from the NRF and be allocated to the Departments of Public Enterprises and Transport, respectively, for the 2022/2023 financial year.

The NCOP received the two Bills on 1 December 2022 after they were passed by the National Assembly.

Following deliberations in the House, the House agreed to adopt them without amendments.