The Minister of Finance intends tabling the South African Revenue Service Amendment Bill, 2002 in Parliament during the third Parliamentary term. The Billis published in accordance withRule 241(l)(c)of the Rules of the NationalAssembly. Interested persons and institutions are invited to submit written representation on the Bill to the Secretary to Parliament by no later than 26 August 2002.
Advisory Board; and to provide for matters connected therewith.
Amendment of section 1of Act 34 of 1997 1.
Substitution-ofsection 3 of Act 34 of 1997 15 2.
controloverthe import, export, movement, manufacture, storage or use of certain goods..
Amendment of section 4of Act 34of 1997 3.
any other legislation concerning the collection of revenue..
IC advise the Minister ofrade and Industry on matters concerning the 25 control over the import, export, manufacture, movement, storage or use of certain goods.
Amendment of section 5 of Act 34of 1997 4. Section 5 of the principal Act, is hereby amended by the deletion of subsection (2).
Substitution of section 6 of Act 34 of 1997 5.
The person appointed as the Commissioner holds office for an agreed term not exceeding five years, but which is renewable.
The person appointed as the Commissioner immediately before the date this Act comes into operation shall hold office until his or her term comes to an end.
Repeal of section 8 of Act 34of 1997 6. Section 8 of the principal Act, is hereby repealed.
Amendment of section 9of Act 34of 1997 7.
"(d) the proper and diligent implementation of Part 51 the Public Finance Management Act, 1999.".
Substitution of Part 3 of Act 34 of 1999 5 8.
The Minister may appoint one or more specialist committees to 10 advise the Commissioner and the Minister on any matter concerning the management of SARS's resources, including asset management, human resources and information technology, subject to subsection (2).
the Minister on matters concerning the terms and conditions of 15 employment of any class of employees in the management structure of SARS, as agreed between the Minister and the commissioner; and the Commissioner on matters concerning the terms and conditions of employment of all employees of SARS, other than employees contemplated in paragraph (a).
(1)A specialist committee established under section 11 must perform its functions impartially and without fear, favour or prejudice.
not more than eight persons who are independent from SARS and are 25 appointed by the Minister; and not more than two senior employees of SARS designated by the Commissioner.
be a fit and proper person; and 30 have appropriate expertise or experience; and have the ability to perform effectively as a member of that committee.
act in any way that is inconsistent with subsection (3) or expose themselves to any situation in whichthe risk of a conflict between their35 responsibilities and private interests may arise; or use their position orany information entrusted to them, to enrich themselves or improperly benefit any other person.
he or she resigns from the specialist committee; 40 the Minister terminates his or her membership because the member no longer complies with subsection(3)or has contravened subsection (4); or the term for which the member was appointed has expired.
Powers 45 13. (I) The Minister may assign specific powers to the members of the specialist committee for the purposes of performing any function contem- plated in section 11.
the exercise of a discretion conferred on the Commissioner by that legislation or agreement; or the determination of the liability of a person for any revenue.
The specialist committee may determine its own procedures.
SARS must remuneratea member mentioned in section 12(l)(a) and compensate €he member for expenses, as determined by the Minister.
Amendment of section 18 of Act 34 of 1997 9.
after collective bargainingbetweenSARSandtherecognised trade unions and with the approval of the Minister.
(2) (a) The terms and conditions of employment of employees contemplated in subsection (1) who are subject to any collective bargaining process in the SARS bargaining unit, must be determined after collective bargaining between SARS and the recognised trade unions have taken place.
must be conducted in accordance with the procedures agreed on between SARS and the recognised trade unions.
(3) The Minister must approve the terms and conditions of employment for any-class of employees in the management structure of SARS.
The Commissioner must submita copy of the terms and conditions of employment determined by SARS in terms of subsection (1) to the Minister.
Substitution of section 19 of Act 34 of 1997 10.
(1) Subject to the Government Employees' Pension Law, 1996 (Proclamation No.
becomes a member of the Government Employees' Pension Fund mentioned in section 2 of the Government Employees' Pension Law, 1996; and is entitled to pension and retirement benefits as if that persori were in service in a post classified in a division of the public service mentioned in section 8(l)(a)(i) of the Public Service Act.
If the Commissioner becomes a member of the Government Employees' Pension Fund, he or she is entitled to the pension and retirement benefits cdcvlated on the same basis as those of a head of department in the public service.
Substitution of section 22 of Act 34 of 1997 11.
all assets, liabilities and financial transactions of SARS; and all revenue collected by SARS..
Repeal of section 23 of Act 34 of 1997 12. Section 23 of the principal Act, is hereby repealed.
Amendment of section 25 of Act 34 of 1997 13.
(b)Once appropriated, the money must be paidto SARS in amounts determined in accordance with an agreement between SARS and the Minister, subject to the 20 Public Finance Management Act, 1999.
Repeal of section 26 of Act 34 of 1997 14. Section 26 of the principal Act, is hereby repealed.
Repeal of section 27 of Act 34of 1997 15.
The following long title is'hereby substituted for the long title of the principal Act: "To makeprovisionfor the efficient and effective administration of the 30 revenue collecting system of the Republic and the control over the import, export, manufacture, movement, storage or use of certain goods; and, for this purpose, to reorganise the South African Revenue Service and to [establish anAdvisoryBoard] make provision for the establishment of advisory committees;provide.to and for incidental matters.". 35 18. The SARS Advisory Board, established by section 11 of the principal Act, is hereby disestablished.
This Act is called the South African Revenue Service Amendment. Act, 2002.
The South African Revenue Service Act, 1997, ("SARS Act") came into operation on 1October 1997. This Act established SARS as an organ of state within the broad public administration, but as an institution outside the public service. This Act granted SARS administrative autonomy. Although SARS is no longer subject to the provisions of the Public Service Act, 1994, it remains subject tothe basic values and principles governing public administration outlined in section 195 of the Constitution.
Since the promulgation of the SARS Actin 1997, there have been a number of factors that have given rise to the need to review some of the provisions of the Act. One factor is the promulgation of the Public Finance Management Act, 1999 (Act No. 1 of 1999) ("the PFM Act"), which regulates the financial -management in the national and provincial governments. The PFM Act also regulates the accountability and responsi- bilities of the accounting authorities, as well as other financial matters of public entities listed in Schedules 2 and 3 of that Act, which includes SARS.
A number of practical problems relating to the current provisions of the SARS Act have also been identified and it is, therefore, proposed that some of these provisions be reviewed.
The SARS Act currently provides that the objective of SARS is the efficient and effective collection of revenue.
to secure the efficientandeffective and widest possible enforcement of national legislation (as listed in the Act) and any other legislation Concerning the collection of revenue that may be assigned to SARS; and to advise the Minister on all matters concerning revenue. SARS, however, also performs certain other functions, which do not necessarily involve the collection of revenue. These functions relate to the control over the import, export, manufacture, movement, storage or use of certain goods, which are perfontied by the customs administration division within SARS. This Bill, therefore, introduces amend- ments relating to the objectives and functions of SARS to specifically incorporate these customs functions.
Furthermore, although SARS reports to the Minister of Finance and administers revenue laws for which that Minister is. responsible, there is from the customs perspective a linkage with the Department of Trade and Industry (DTI),.
implements the tariff amendments requested by DTI; and administers incentive schemes devised by DTI to facilitate trade.and'stimulate economic growth. In this regard, SARS also fulfils the function of advising the Minister of Trade @d Industry on matters concerning the control over the import, export, movement, storage or use of certain goods. The Bill, therefore, proposes an amendment to the SARS Act to reflect this function.
Currently the SARS Act provides that the Minister of Finance must appoint, the Commissioner after consulting Cabinet and the SARS Board. This Bill proposes a change to provide that the Commissioner must be appointed by the President.
In terms of thz current provisions of the SARS Act, SARS exercises its powers and performs its functions under the policy control of the Minister of Finance and subject to the directives and guidelines on policy matters issued by that Minister.
When the SARS Act came into operation in 1997, the PFM Act had not yet been promulgated. The purpose of the PFM Act is to prescribe a system of financial management in the national and provincial spheres of government and to regulate the accountability of the public sector. Chapter 6 of this Act specifically deals with public entities and outlines the fiduciary and other responsibilities of the accounting authorities of these entities. SARS is included in Schedule 3 to the PFM Act, which covers public entities with lesser degrees of autonomy.
As the PFM Act already ensures an effective financial accountability system with regard to public entities, the necessity that SARS still be accountable to the Minister of Finance in terms of the SARS Act has to a large extent fallen away. The Bill, therefore, proposes an amendment to the Act to delete the reference to the specific powers of the Minister of Finance in the SARS Act where they are dealt with in terms of the PFM Act.
The SARS Advisory Board was established by section 11 of the SARS Act. The function of this Board is to act as an advisory and consultative body for the Minister of Finance and the Commissioner on matters concerning the administration of the revenue collecting system of SARS. This Board is somewhat unique in nature, as it has mainly an advisory function and is not really involved in policy and decision making.
SARS as an organisation has changed in the last few years since administrative autonomy was granted to it. The role and functioning of the Board has been debated in several forums and at the Board meetings, because the members of the Board felt that the role of the Board was not clearly defined. Taking into account the natuie of the SARS Act in relation to other legislation governing the functioning of SARS, including the PFM Act and the reporting relationship between the Minister, the Commissioner and the Advisory Board, it is proposed that the existing Board be dissolved. The Bill provides that a number of specialist committees be appointed by the Minister to advise him or her and the Commissioner on technical matters such asHuman Resources, Information Technology and Asset Management.
after collective bargaining between SARS and the recognised trade unions; and with the approval of the Minister. SARS must obtain the approval of the Minister of Finance before determining the terms and conditions of employment of employees of SARS.
This Bill proposes that the Commissioner, as chief executive officer of SARS, may approve the terms and conditions of employment of SARS employees (other than certain employees in the management structure of SARS mentioned below). The specialist committee will have the function of advising the Commissioner on human resource issues and the ultimate responsibility in this regard will lie with the Commissioner. A provision is also inserted in the SARS Act that requires adequate reporting by the Commissioner to the Minister with regard to the terms and conditions of employment for these employees.
The Bill proposes that the Minister of Finance must, on the advice of the specialist committee, approve the terms and conditions of employment of any class of employees in the management structure of SARS, to be agreedbetween the Minister and the Commissioner.
Interms of section 19 of the SARS Act, anypersonappointedbySARS as an employee becomes a member of the Government Employees' Pension Fund (hereinafter referred to as "the GEPF"): Although section 19 of the SARS Act obliges employees to becomemembers of the GEPF, section 19 cannot override the provisions of the Government Employees' Pension Law, 1996 (Proclamation No. 21 of 1996, hereinafter referred to as "the GEP Law"), which incorporates the Rules governing the GEPF-in Schedule 1 thereto.
Although a contract employee must in terms of section 19 of the SARS Act become a member of the GEPF, such employee may be excluded from the Fund in terms of section 5 of the GEP Law.'The need has, therefore, arisen to amend the SARS Act to bring it in line with the provisions of the rules and laws of the GEPF.
Section 25 of the SARS Act deals with the chief source of income of SARS, i.e. the money appropriated annually by Parliament. This amount is calculated in accordance with the.estimates of income and expenditure prepared by SARS, which are prescribed in the SARS Act, but which are also regulated in terms of the PFM Act.
The Bill proposes an amendment to provide that a method of determining SARS's funds may be agreed between the Minister and the Commissioner, subject to the approval of Cabinet.
All Cabinet members (Cabinet Memorandum) SARS Board members.
The South African Revenue Service and State Law Advisers, are of the opinion that the Bill must be dealt with in accordance with the procedure established by section 75 of the Constitution since it contains no provision to which the procedure set out in section 74 or 76 of the Constitution applies.