TLAB, TALAB and Rates Bill: consideration of policy issues and processing

Meeting report

TLAB, TALAB and Rates Bill policy issues: National Treasury response

Mr Mpho Legote, Director: VAT, Excise Duties and Sub-National Taxes, National Treasury (NT), clarified certain issues relating to the bills under consideration:

Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B21 - 2021]
Taxation Law Amendment Bill [B22 - 2021] (TLAB)
Tax Administration Laws Amendment Bill [B23 - 2021] (TALAB)

He referred to increasing the excise duty rates, and its effect on the legal tobacco market, which had pricing challenges compared to illicit tobacco products. Treasury had noted the concerns that were raised with regard to the illicit trade, but it did not think the use of excise duties was the solution to dealing with the problem, which was a factor of enforcement. It needed to be effectively addressed through robust compliance and law enforcement mechanisms. The South African Revenue Service (SARS) had been working hard to rebuild internal capacity. There was also the Inter-Agency Working Group on Illicit Trade that it had established. SARS had also put product counter mechanisms into factories to monitor compliance. Treasury looked at the illicit tobacco trade as an enforcement issue, and both capacity and enforcement needed to be strengthened. It had to be acknowledged that in the recent months, the Treasury had seen SARS doing quite a lot in raids, seizures and destruction of illegal cigarettes.

Another issue that had been raised in connection with the illicit tobacco trade was that government should put measures in place such as stricter border control and enforcement, and also ratification of the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC). An independent track and trace system also needed to be implemented before any increases were made to excise duty rates. Treasury did not accept that it should stop implementing excise duty rate increases before all of those things had been implemented. It was of the view that it was possible for government to currently oversee the implementation of these measures, and also not neglect the implementation of excise policy framework. It did not think that these two processes were mutually exclusive. SARS was implementing those measures, and the Department of Health (DoH) was also looking at the issue of the ratification of the WHO's Illicit Trade Protocol on Tobacco.

Another important issue related to the illicit trade was the suggested minimum unit price, because of the prevalence of cigarettes that were sold for below R20. NT noted that the current framework did not make provision for a minimum unit price, but it was looking at it in the current review process it was undertaking to see how that initiative could assist in dealing with some of the issues around the illicit trade. As had been indicated in yesterday's meeting, a minimum unit price would not necessarily deal with the illicit aspect of the market -- it would just raise the price of the current legal products, which could affect the affordability of tobacco products. That was one aspect of a minimum unit price that NT thought might be quite useful, but it did not necessarily mean that once one had a minimum unit price that everybody was now tax compliant. It just meant that nobody would be selling a packet of cigarettes below a certain price point. 

Discussion
Mr D Ryder (DA, Gauteng) asked if Members needed to restrict themselves to the inputs that were given, or if could they ask some broader questions around the bills at that stage. He was a reasonably new Member, and was still learning. At what point did Members introduce any other concerns that they may have?

The Chairperson said that Members could raise points, as long as the points were related to the three tax bills under consideration.

Mr Ryder appreciated the response from Treasury, as 21 years ago he had been a smoker, and he had some sympathy for the tobacco and the alcohol industry, which “had a big door open.” It was much more obvious in the tobacco industry, where a door had been opened by government to illicit trade through the lockdown. The illicit trade had existed before the lockdown because the taxes were quite heavy -- with good reason, as had been explained. He noted in the response from Treasury that the issue was that Parliament wanted to push the health aspect, and wean people off smoking via financial inducement, or whatever the case may be. The reality was that people were aware of the health issues around smoking, but continued to smoke. People would continue to smoke, no matter what the price was. This had been seen during that first hard lockdown, where people were paying upwards of R100 for a pack of illicit cigarettes. The government had “promoted” the illicit trade. by helping to create a slightly enabling environment for it.

He had some sympathy for the industry, as well as the alcohol industry. He did not see a very proactive stance in the public domain from SARS to prevent the illicit trade. They had told the meeting yesterday that there had been some “big wins” recently, and that must be applauded. He urged Government to do more, and to try and bring the illicit trade into line. It would help everybody. He repeated his request for some sort of reporting mechanism, whether it was led by SARS or the industry, and then filtered and delivered to SARS. He urged an open discussion channel between the industry and SARS, so that there could be reporting from the industry. It would work best if people were allowed to blow the whistle on each other. This might result in some "red herrings," but it would result in a better overall picture in clamping down on the illicit trade.

He wanted to talk about the Tax Administration Laws Amendment Bill (TALAB). He had looked at the state of budgets that were published through the Government Gazette on 30 November and compared that to the fact that there was a recession looming. South Africa (SA) was not in a recession yet, but had had one period of contraction. When one looked at what SARS had done, SA was almost 20% up year-on-year in collections. As there had not been 20% growth in the economy, SARS was “clearly doing a much better job” of collecting revenue. Members had heard about the windfall that SA had had because of commodity prices, etc. The October 2020 to October 2021 comparison was still consistent, and showed a 20% increase in collections. SARS was doing a good job. Some of the issues that were raised in relation to the TALAB in terms of late payments and penalties, etc., were quite restrictive, and putting a lot of pressure on people who were mostly compliant.

He was disappointed by the lack of presentations during the public participation process. He thought that more taxpayers should be concerned that those who were paying tax were being very carefully managed and penalised if they misbehaved, and perhaps not enough was being done about finding the people who were totally evading tax. With the TALAB and some of the penalties there, he could understand why people would be a bit unhappy, and feel that those who were already being compliant were being targeted.

He made the observation that SA had tax increases, new taxes coming in, and a shrinking tax base, and argued that they really needed to try and fix the spending patterns of the government, rather than tryto overburden an already considerably burdened, but shrinking tax base. He did not really see that with the TALAB -- that the net was being cast wider -- although the state of the budget (SOB) was indicating that SARS was doing a much better job.

Ms Yanga Mputa, Chief Director: Tax Policy Unit, NT, said that her colleagues would respond to the comments.

Mr S Du Toit (FF+) wanted to know about the high taxes being placed on tobacco. For instance, if the tobacco tax was lowered to R12 or R8 per packet (for example), what effect would that have on tobacco production in SA? Had Treasury done the maths on the export of tobacco to other countries? If tobacco was sold at a better price in South Africa, the local producers would be able to sell at a more competitive price in the larger export market, and more jobs would be created in the process.

NT responses
Mr Legote responded on the issue of implementation of high excise in dealing with the consumption of tobacco products. Without increasing the excise on an annual basis, tobacco products would become affordable over time. There was an issue around the initiation of young people that involved tobacco products. Price measures were the one policy instrument that Treasury had in dealing with the issue of the affordability of tobacco products and also their accessibility, especially for initiation purposes.

Excise taxes themselves could not work in isolation. There were other complementary measures that were implemented in dealing with the overall consumption of tobacco products. In SA over the years, the Department of Health (DoH) had implemented quite a lot of non-tax measures to deal with their consumption. One of the most important measures was the ban on smoking in public places. That had had quite an impact on the de-normalisation of smoking. Before that, people could smoke anywhere. He thought that excise taxes worked together with non-tax measures to deal with the bigger issues around tobacco consumption. He agreed in the sense that tobacco had nicotine, and was quite addictive. It had been observed that in some cases, during the lockdown people had been prepared to pay higher sums of money to get access to illicit tobacco products. It was not everybody who smoked who had gone out to purchase tobacco at high prices. Research had been done to see how many people had quit smoking during that period because of the restrictions on sales.

Pricing played an important role, but it was not a silver bullet for solving the problem of smoking, because tobacco was quite addictive. Based on economics, it was important that even with those that did not stop smoking, there was a pricing mechanism in effect. Smoking had consequences for public health caused via secondary smoking. Those who continued to smoke also paid for their smoking with their own health consequences. Treasury used excise tax to make pricing a factor when choosing to smoke. Excise tax had a role to play, but there would be those who would not quit, but needed to pay for the externalities that were caused by their tobacco consumption.

There was a suggestion about making tobacco products less expensive, so that there was more production for export. The issue was that exports did not attract excise. Currently, excise applied only to local consumption. Therefore, making tobacco less expensive so that it could be exported did not work from an excise point of view, because exports did not attract excise taxes. If the question was to make tobacco products cheaper locally, it became a problem because it was against public health, in the sense that the whole objective of implementing an excise tax was to reduce consumption. Excise did not apply to exports, so if tobacco manufacturers wanted to export, they could do that without any excise obligation, because exports did not attract excise tax.

Mr Chris Axelson, Chief Director: Economic Tax Analysis, NT, responded to the question on trying to broaden the tax base, and the small number of tax payers. Everyone paid taxes, because everyone paid value-added tax (VAT), the fuel levy, and indirectly, corporate income tax. There were a smaller number of personal income tax payers, but also a lot of people paid excise duties on tobacco and alcohol. In that sense, there was a broad tax base. However, the tax base had been under pressure for a number of years. In Treasury’s previous two budget reviews, it had avoided increasing income tax rates, and had specifically stated that it wanted to broaden the tax base so that there was a greater amount of economic activity, higher economic growth, and Treasury could get increased revenues through those strategies and approaches, combined with a more effective and efficient SARS. It had tried to bolster some of SARS’s funding so it could be more effective.

Treasury agreed with the broadening of the tax base. In the excise duty space, it was different, since there were health objectives. If one looked at some of the taxes where Treasury wanted to induce a behavioural response, one could say that it would be fine without any revenue there. For example, if one had a carbon tax, one would not want industry to emit carbon. If those revenues went down, that would be a good thing. It would want the tax base for those sorts of instruments to decrease over time. Overall, Treasury thought that a broader tax base was the best approach to increasing revenue.

The Chairperson asked if the Committee Secretary had sent the reports on the bills.

The Committee Secretary replied that he had done so.

The Chairperson said that the only report that remained was that on the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B21 - 2021] (Rates and Monetary Bill). Had Members looked at the other two reports, so that the Committee could treat them “informally”?

He said the meeting would reconvene at 11:30. The Committee would treat the reports informally, because they dealt with policy issues. It would then formally look through the bills, and then go back formally through the reports.

Members agreed to reconvene at 11:30.

The Chairperson said that the Committee had considered the Rates and Monetary Bill quite exhaustively. The Bill was not easy to process, because these were retrospective treatments of a Bill. He asked if there were any new policy issues arising. There were none. In that case, all the Committee had to do was go through the Bill clause-by-clause. That would not take long, since it was 20 pages, and a lot of it was schedules.

The TLAB was 44 pages long. He asked if there were any policy issues that Members wanted to raise, but there were none.

The Chairperson noted that the Committee had not received any comments on the TALAB. He asked if there were any policy issues that Members wanted to raise, and there were none.

He had heard Mr Ryder’s comment that more people should come forward, but he thought the reason they had not come forward was because they had been dealing with the issues in the National Assembly Portfolio Committee. He realised that these were Section 75 bills being dealt with, and the limits that the Committee had, and moreover the complexity of processing tax bills. The Committee had never had many submissions from the public on tax bills.  It was something the Committee had to reconcile itself to. He agreed with Mr Ryder that it would have been good to have a greater range of people appearing before the Committee, as it would have given it a better sense of the tax bills, and the differences of views. It also helped the Committee to process other bills, even non-tax bills, if it heard from a wide range of stakeholders what it was that they felt about a bill, even if the Committee might not be able to do what the stakeholders wanted through of a majority vote on it.

The meeting resumed at 11:30.

Rates and Monetary Amounts and Amendment of Revenue Laws Bill

The Chairperson said that the Committee had received the reports on the bills earlier, and those were easier to process, because it had received no suggestions. As it was a written monetary bill report, the Committee needed to look at it more carefully, because that was what it processed following engagements with civil society stakeholders. If Members wanted more time on the report on the Rates and Monetary Bill, the Committee could adjourn. Comments had been made the previous day on the first draft of the report. A second draft had been sent through that morning. He was reasonably satisfied with the report, and thought that it was a good overview.

He referred the Committee to the report.

Report of the Select Committee on Finance on the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B21 - 2021]

1. Introduction and Background

The Chairperson said that that part was covered accurately. He asked if Members wanted to comment on that section.

2. Overview of the proposed amendments in the 2021 Rates Bill

The Chairperson said he was having trouble connecting to the platform.

Mr Ryder said he did not have the report on the Bill, but then saw that it had just come through in an email.

3. Public Participation Process

The Chairperson thought that the summary of the key issues raised was reasonable.

3.2 Recommendations made by the stakeholders

The Chairperson thought that the report gave accurate coverage of those recommendations.

4. Responses from the National Treasury on issues raised

The responses from Treasury had been received the previous day, and the support staff had put them in the report. He had commented on a draft version of the report; there were some changes required, which had been effected in the version of the report that Members had.

5. Observations and recommendations

5.1 The Committee noted that the annual tax Bills had to be processed within stringent Money Bills Act timelines and that this year in particular, the local government elections and the further extension sought by the Minister of Finance had extended the tabling of the Medium Term Budget Policy Statement (MTPBS) to 11 November, as opposed to the third week of October each year, thus putting more time pressures on the Committee than usual.

The Chairperson commented that sometimes he did not know what Treasury wanted from the Committee. If it were to make significant changes to the Rates and Monetary Bill, the only way to do that would be to bring forward the October MTPBS. That would mean perhaps two weeks earlier. There would be "an uproar” if the Committee were to extend the process at the other end. Parliament was rising on 15 December. Parliament often rose around 10 December. Members had to do constituency work for two weeks at least, but often it boiled down to one week. There would not be “happiness” within the majority party if Members could not have a constituency period. Then people went into the festive period. At the other end, meaning December, he could not see much room to maneouvre.

He read the following section to Members, because it affected all of them:

"Under the challenging circumstances, due attention was given to the concerns of stakeholders, and the way forward beyond this bill was also suggested. However, for effective processing of the tax bills, the Committee believes that the National Council of Provinces, in consultation with the National Assembly, needs to better restructure the parliamentary programme, as these bills get referred to the National Council of Provinces committees too late in the last quarter of the year, as indeed do the other Bills related to the Medium Term Budget Policy Statement. The Committee raised this repeatedly with both the House Chairperson for Committee, Oversight and Intergovernmental Relations (IGR) and the National Council of Provinces Chief Whip, and requested them to raise our concerns with their National Assembly counterparts, but there has been no progress. The Committee Chairperson is mandated to raise it with them yet again."

The Chairperson commented that he did not know what more the Committee could do. He had raised that issue, as had his colleague, Ms D Mahlangu (ANC, Mpumalanga). It was for Members to raise it with their Chief Whips and the Programming Committee as well.

5.2 The Committee noted that taxes on alcohol and tobacco were guided by a policy framework that targeted the excise duty burden, and that National Treasury would review this policy framework during the 2021/22 financial year. The Committee further noted that the purpose of excise taxes on tobacco and alcoholic beverages was to reflect the harmful external costs related to excessive consumption and raise tax revenue. Also, that the World Health Organisation recognises the proposed measures as one of the most cost-effective policy approaches to reducing overall consumption and improving population health, and had reported in a 2019 study that on a per person basis, South Africa’s cigarettes were more affordable in 2018 than in 2008.

The Chairperson commented that there had been some grammatical glitches there, which were addressed by the Announcements, Tablings and Committee (ATC) reports division. Ms Esther Mohube, Content Advisor for the Select Committee, would look at that again, and the Committee would do that too.

5.3 The Committee also noted the issues submitted by the stakeholders in the tobacco industry that the increase on tobacco prices was unsustainable; unjustifiable and above inflation; non-compliant with National Treasury’s own excise policy and detrimental to the continued survival of the already distressed legal tobacco industry in South Africa, perpetuated by the impact of the COVID-19 lockdowns. The Committee expressed its concerns about the job losses and the closing down of about 30 black farmers’ businesses and sympathised with the concerns raised. The Committee recommends that the South African Tobacco Transformation Alliance and Black Tobacco Farmers Association forward correspondence to National Treasury on their application for government funding because of losses through COVID-19, and that National Treasury replies to this within a reasonable period and forwards a copy of their response to the Committee.

5.4 The Committee repeats its previous concerns about the need to balance the concerns of the tobacco industry with the concerns about the adverse consequences of smoking. The Committee recommends that National Treasury discuss the concerns of the stakeholders in the tobacco industry before deciding on amendments to the tax Bills in ways that are consistent with the need to ensure the confidentiality on rates and monetary increases in the Rates Bill.

The Chairperson commented that Members should get the wording legally couched so it was legally compliant. He recommended that the Committee confer with Adv Frank Jenkins, Senior Parliamentary Legal Advisor, and that Ms Mohube, the Committee Content Adviser, check that that paragraph was done in a way that did not mean that the tobacco industry had said the Committee was meant to discuss the actual excise increases with it, where industry would know about it before it was even presented formally by the Minister. If Treasury was doing it for the alcohol and tobacco industries, then others would ask. The Committee could not do that, so he had asked Adv Jenkins and Ms Mohube to check if the wording was correct. They could confer with Treasury, but only insofar as technical and legal aspects were concerned on the wording, and not the content. Those were decisions that Parliament made, and the Executive must not be consulted on that.

5.5 While the Committee recognises some progress made, it reiterates that National Treasury, the South African Revenue Service and other relevant agencies should significantly increase their efforts to address the illicit tobacco trade, especially in view of its upsurge with the COVID-19 lockdown restrictions, the even greater health challenges that the illicit tobacco trade pose, and the decrease in tax revenue.

Although the Committee had received the report late, the Chairperson wanted to suggest that it could informally accept the report. The choice was the Committee’s. It could postpone adopting the report, and could vote on the Bill. He asked Members for comments on the process and the content.

Mr Ryder agreed with the Chairperson that the report was a reasonably comprehensive document. He wanted to propose the addition of a final recommendation. His recommendation was as follows:

5.6 The Committee calls for a greater degree of co-operation and interaction between the industry and the South African Revenue Service, to bring about better compliance for the benefit of all legitimate stakeholders, as well as for the benefit of the fiscus and the country.

The Chairperson agreed with Mr Ryder, and said his behaviour over the tax bills had been exemplary. He suggested that Members “take a leaf out of Mr Ryder’s book.”

The Chairperson went through the Rates and Monetary Bill briefly.

Mr Z Mkiva (ANC, Eastern Cape) moved formally for the adoption of the Rates and Monetary Bill, and Mr E Njadu (ANC, Western Cape) seconded.

The Select Committee on Finance, having considered and examined the Rates and Monetary
Amounts and Amendment of Revenue Laws Bill [B21 - 2021] (National Assembly – section
77), referred to it, and classified by the JTM as a Money Bill, accepted the Bill.

The Democratic Alliance (DA), Economic Freedom Fighters (EFF) and Freedom Front + (FF+)
reserved their positions.

Taxation Laws Amendment Bill

The Chairperson said that minor changes had been made, such as using “on” rather than “in”, etc.

3. Changes made to the 2021 TLAB

National Treasury reported that two changes had been made to the 2021 TLAB, after the introduction of the Tax Bills by the Minister of Finance in the National Assembly.
(See ATC-166-2021-12-08 for the full details.)

4. Key issues raised in the 2021 TLAB

The Chairperson said that this was an important section.

4.2.3 Clarifying rehypothecation of collateral within collateral arrangement provisions.

The Chairperson remarked that he had looked at that paragraph "in despair.” Members should not be “too apologetic,” as he could not think that an average Member of Parliament in the USA or UK, unless they had financial skills, would know exactly what that paragraph 4.2.3 implied.

He then went through paragraphs 4.2.4 to 4.3.2 briefly.

He had made a particular change, but he thought that it was a policy matter. Parliament spoke of he/she or she/he. Parliament was “progressive overall,” and sensitive to the entire transgender and broader sex identity issues. He had been told that the new bills that Parliament was getting referred to "they/their." In some cases, it might be "he/she/they," to take into account the need to be more sensitive to people with complex identities. He asked Adv Jenkins if this change was happening in reports generically, and if not, what was stopping the Committee from doing it. He said that “they” could be used, but the problem with “they” was that it did not communicate the consciousness for all to be sensitive to that matter. If they used "he/she/they" for the next two years or so, and then after that the "he/she" could be dropped, then that would be fine. He asked if Parliamentary Legal Services was applying its mind to that.

Adv Jenkins said that Legal Services would work with that matter from the perspective of drafting legislation. It did not really draft these kinds of reports, but he understood the question. Maybe one should look at using “the person” or “it.” Legal Services did not really like "he/she" in drafting, nor did it like "and/or," since such constructions created a bit of confusion and did not read well. It tried not to use them. Parliament could use something else. He had not applied his mind specifically to that report, but he could look at it.

The Chairperson understood that the legislation would not have "he/she" -- it would have "they" and "their." According to what he had been told, the bills that were already before Parliament which were amending existing laws, would remain with that style. All future (new) bills would have "they/their." He wanted to suggest that for now, to create consciousness, Parliament use "he/she/they," or it could drop the "he/she" and put "they." He had raised that matter with Ms Mohube, but it was not a matter for her to consider -- it was something that the Committee had to decide.

Mr Ryder agreed with the Chairperson. Raising awareness and consciousness could only be deemed appropriate. "He/she/they" would be ideal.

The Chairperson said it was consistent with the policies of Government as a whole. It was the 16 Days of Activism in SA, and people with multiple identities were often made victims, abused, humiliated, and sometimes even killed. He asked Adv Jenkins if there was any reason why the Committee could not use "they/their" in reports.

Adv Jenkins thought that it was the correct thing to do from a drafting perspective, as well as the other reasons that had been mentioned. He agreed with the Chairperson.

Mr Du Toit said that in normal documents in the public arena, in the preface one could just put something on top and go on as documents that were drafted normally. Otherwise these documents would be much longer than normal if the different "he/she/it/they" were put in the document. Could it not just be mentioned in the preface, and then have the document as normal?

The Chairperson said that he had made that comment only on the initial part of the report. He did not see "he/she" anywhere else. It was not as it if happened often. It was in paragraph 4.1.1 in the line, “The abovementioned amendment was proposed to ensure that, when an individual ceases to
be a South African tax resident before he/she retires.” He had simply put "he/she/they." That was the only time he saw it. As far as he knew, all bills from Government would in future have "they/their." Bills would not have "he/she/they." The reason he had suggested it was simply to draw consciousness about it for a while, and then "he/she" would be dropped. He asked if Treasury was aware that all new bills had to have "they/their." He noted that tax bills went back many years -- Parliament was amending tax bills that had been passed many years ago.

Ms Mputa said that Treasury was aware of it. When it was making tax bills, it made them gender neutral. If "he/she" was required, then it would have to be "he/she," but Treasury kept on making changes to be gender neutral.

Mr Ryder said an important clarification had been raised in 4.2.3 of the report. The comment made was that Treasury was adamant to say that it would be done in a tax revenue neutral way (he was not sure if it was that paragraph, since he did not have all his papers with him due to moving between different locations). It would not affect the amount of tax that was paid or received, but it was just to adjust things for correctness. It was an important admission, and one that should not just be left out.

Ms Mputa said that she did not hear the question because her network was bad.

Mr Ryder said it was just a point in paragraph 4.2.3. The point was made quite strongly by Treasury that it was a tax-revenue-neutral amendment that was being pursued. He thought that that was quite an important thing to include in the report -- to state that there was not an intention to change the tax payable or receivable, but rather to “find ourselves in a tax-neutral position.”

Ms Mputa said that that paragraph was where Treasury had changed the effective date to 1 January 2023. When Treasury was making the changes in terms of the Rates and Monetary Amounts Bill, Treasury had to say what the revenue impact was, because it would postpone the effect of the changes after the Bill had been tabled by the Minister in Parliament. Treasury was saying in its motivation that because this was aimed at curbing abuse and anti-avoidance, it was not yet quantifiable because the law had not yet been changed, so it was revenue-neutral.

Mr Ryder said he was happy with that response.

5. Observations and recommendations

The Chairperson asked for the responses by Treasury to be taken out of the second paragraph.

Mr Ryder commented on the third paragraph. He had raised the concern that sometimes, particularly with the carbon tax, SARS was maybe appearing to be pursuing low-hanging fruit, and “going for the soft and easy targets.” Specifically, if one looked at the harvested wood products, he thought that the government needed to make sure that certain taxpayer types were not feeling that they were being overly burdened or overly targeted in that process. Perhaps the Committee should re-emphasise that there needed to be a degree of fairness in all of the taxation that happened. It was a “mouthful.” and he was not sure how to craft that, but it was something that he would have liked to see in that particular paragraph.

The Chairperson said that the rules of the National Assembly allowed for Mr Ryder to say that the DA would like it noted. He could write those lines and send it. What Mr Ryder had said was clear, and the Chairperson would help with the wording. Mr Ryder could send a draft to Ms Mohube and the Chairperson, and both would look at it. Any party had a right to say that it noted something, which had been established in 2014.

Ms Mputa said there was an issue involving the carbon tax, and Treasury had a carbon tax specialist on the platform.

Ms Sharlin Hemraj, Director: Environmental and Fuel Taxes, NT, said that the carbon tax had been consulted on previously over a ten-year period. There had been extensive, cross-cutting consultations with the sectors as part of industry associations, Business Unity South Africa, as the broader representative, as well as with specific companies throughout the process. Those comments had been taken into account as part of bilateral engagements. It was also a part of the parliamentary process as well.

On the issue of the harvested wood products, there were several engagements held through the Department of Forestry Fisheries and Environment (DFFE) around the scope of that. Treasury had participated, and had also had engagements with the industry as part of the tax laws process. The Treasury took note of the comment. It was a very open and transparent process around the tax laws, even prior to the enactment of the taxes. The Treasury took note of the comment, and would engage further going forward.

Mr Ryder wrote the following proposal in the chat box: "The Committee is of the view that all taxation laws need to be applied fairly and that the perception of pursuing industries that may consider themselves to be low-hanging fruit needs to be well-managed, and actual pursuit should be avoided."

The Chairperson said that he did not see anything there that was controversial or party policy-embedded. It was a general point. He did not think that one could dispute the substance and the general form.

Mr Njadu said that with the response from Treasury and the latest speaker on the consultation process that had taken place, and which was also a parliamentary process, the Committee should take note of what Mr Ryder was raising.

The Chairperson briefly went through the TLAB itself, which had 44 pages.

Ms M Mamaregane (ANC, Limpopo) moved to adopt the Bill, and Ms N Nkosi (ANC, Mpumalanga) seconded the motion.

The Select Committee on Finance, having considered and examined the Taxation Law
Amendment Bill [B22 - 2021] (National Assembly – section 77), referred to it, and classified
by the JTM as a section 77 Bill, accepted the Bill.

The DA, EFF and FF+ reserved their positions.

Tax Administration Laws Amendment Bill

The Committee next considered the Tax Administration Laws Amendment Bill (TALAB).

3. Key issues raised by stakeholders

This section briefly summarises the key issues raised during National Treasury and the SARS public consultation process. The Select Committee on Finance had received no public comments on the 2021 TALAB.

Mr Njadu moved to adopt the report, and Ms Mamaregane seconded the motion.

The DA, EFF and FF+ reserved their positions.

The Chairperson briefly went over the TALAB itself.

Ms Nkosi moved to adopt the Bill, and Ms Mamaregane seconded.

The Select Committee on Finance, having considered and examined the Tax Administration Laws Amendment Bill [B23 - 2021] (National Assembly – section 75), referred to it, and classified by the JTM as a section 75 Bill, accepted the Bill.

The DA, EFF and FF+ reserved their positions.

The Chairperson wanted to check if the Committee had voted on all the reports and all of the Bills.

Mr Nkululeko Mangweni, Committee Secretary, replied that the Committee still needed to vote on the Rates and Monetary Bill report and the TLAB report.

Report of the Select Committee on Finance on the 2021 Taxation Laws Amendment Bill [B22 - 2021] (National Assembly- section 77)

Mr Njadu moved to adopt the report, and Ms Mamaregane seconded.

The DA, EFF and FF+ reserved their positions.

Report of the Select Committee on Finance on the 2021 Tax Administration Laws Amendment Bill [B23 - 2021]

Ms Mamaregane moved for the adoption of the report, and Mr Mkiva seconded.

The DA, EFF and FF+ reserved their positions.

Committee matters

The Chairperson asked if that day’s meeting was the last Committee meeting.

The Committee Secretary replied that that was correct.

The Chairperson thanked Treasury for its cooperation through its attendance at the Committee’s meetings. The Committee would be voting on the Financial Sector Laws Amendment Bill and the three tax bills on Tuesday and Wednesday next week (in the NCOP(.

Adoption of Committee minutes

Mr Ryder moved the adoption of the minutes of 9 November 2021, and Mr Du Toit seconded.

The Chairperson said that he was absent from the evening meeting on 16 November.

Mr Ryder observed that the Chairperson had sent an apology for the evening meeting, although he was marked as present.

The Chairperson said that he did not know why the word “adjourned” had been used. It was a “closure.” He asked Adv Jenkins where “adjournment” came from. He interpreted the word as a scenario where the Committee met, had not settled an issue, and there were outstanding issues. It was “adjourning” to “reconvene” and pick up from exactly where it left off.

Adv Jenkins said that he did not know. He agreed that a meeting should start and close. It was not a permanent meeting that adjourned and ran through the year.

The Chairperson said that it did not matter what language one used -- the concept was the same. A meeting ended. That day, the Committee’s meeting was ending. One could not say “adjourned.”

Mr Ryder agreed with the Chairperson.

The Chairperson said that he had been raising the point about the word “adjourned” for over two years. In the case of the evening meeting, it could be worded as, “The meeting ended at 20:47.”

There were no further changes made, and no objections.

Mr Njadu moved to adopt the minutes of 17 November 2021, and Mr Ryder seconded.

In the minutes of 19 November 2021, the Chairperson suggested numbers might be better than bullet points in the minutes.

Mr Ryder moved the adoption of the minutes, and Mr Njadu seconded.

The Chairperson asked that the minutes of the 23 November 2021 meeting register the exact time the meeting had started, e.g. 9:01 or 9:02.

Ms Mamaregane moved the adoption, and Mr W Aucamp (DA, Northern Cape) seconded.

Mr Ryder moved the adoption of the minutes of 30 November 2021, and Mr Du Toit seconded.

Mr Njadu moved the adoption of the minutes of 2 December 2021, and Mr Aucamp seconded.

Chairperson's closing remarks

The Chairperson thanked the Members for their co-operation. It had been a difficult and challenging year, with COVID-19, the July unrest, and then the local government elections. He thought that under the circumstances, the Committee had been able to get a reasonable amount of work done, given the limited space and time it had, and the shortened parliamentary year.

He wanted to thank the support staff in particular. All of the support staff were always available. MPs did not have ordinary hours such as 08:00 to 17:00, Monday to Friday. He dealt mostly with Mr Mangweni, as most chairpersons did with committee secretaries. Mr Mangweni was relatively new as a Committee Secretary, and had become the full-time secretary in late 2019. It had been a “delight” to work with him, as it had been with the other support staff. The Committee was lucky to have the support staff, because the services they provided to the Chairperson were actually provided via him to the Committee.

He also thanked the broader parliamentary staff that came to the Committee’s aid when it responded to information and communication technology (ICT) issues on Zoom meetings.

The Committee would meet again as the Select Committee on Appropriations. The Members would be back again under the Chairperson of the Select Committee on Appropriations, Ms D Mahlangu (ANC, Mpumalanga).

The meeting was adjourned.