Hon Deputy Speaker, hon members, this House has before it the Taxation Laws Amendment Bills 2011. These Amending Bills complete the tax legislative process arising from my annual February Budget Speech. As you know, taxes are vital for government so that it can meet its commitments to all of our people. Government expenditure, targeted at appropriate programmes, plays a critical role in sustaining economic growth in the midst of an uncertain recovery from the 2008-09 recession.
One fundamental principle of taxation is that members of society should pay tax according to their economic means. Everyone must pay their fair share.
I will quickly outline some of the features of these two Bills. The first, of which South Africans are already beneficiaries, is that the Bill before you is to provide R8,1 million in personal income tax relief for the benefit of ordinary South Africans. As part of this package, most persons who earn R59 750 a year earn it tax free. People between the ages of 65 to 74 can earn R93 150 tax free.
A second provision in these Bills is the medical credits. Currently, wealthier taxpayers effectively receive relief of 40 cents to the rand and lower-income taxpayers get relief of only 18 cents to the rand. We now have a more equitable credit system, which will ensure that all taxpayers get relief to the extent of 30 cents to the rand.
Section 45 of the Income Tax Act has been the matter of much debate in the committee and in the public domain as well. This section was intended only to facilitate the movement of assets within a single group of companies without incurring undue tax charges. As is often the case, government's stated intentions and the ultimate outcomes created by sophisticated financiers often provide two very different results. They find ways to cut corners and take the gaps, if you like. It is this linkage between section 45 and the excessive levels of debt that prompted us to take action. Under the final proposal, section 45 will be retained but tightly controlled.
More specifically, taxpayers will need to obtain preapproval from Sars before obtaining interest deductions associated with section 45. Excessive debt funding not only undermines the tax system but also raises concerns in respect of systemic economic risks, making companies far too prone to economic downturns. In essence, companies borrow a lot of money, incur a lot of debt, and then over a period of time pay very little tax.
The loss of revenue due to excessive leveraged buy-outs, which these schemes are called, is not unique to South Africa. It happens in other countries as well. The consequence of these revenue losses ultimately means that government cannot pay its debts as they become due.
Another provision in the legislation is relief for small businesses. Small businesses will be able to use the simplified microbusiness turnover tax for gross earnings up to R1 million even if they are registered for VAT. The rates for the turnover tax are also to be reduced by 1%, leaving the maximum rate at 6%.
The research and development incentive moves to the Department of Science and Technology for administration and there will now be a preapproval process so that taxpayers can have greater certainty that there is some record of these projects as well.
Much has been done over the years with regard to an international headquarter company incentive. South Africa has many natural advantages as a gateway to the region, such as its location, infrastructure, and sophisticated financial services. In 2010, we changed the tax and exchange control rules to overcome inadvertent barriers that prevent South Africans from utilising these advantages. In the current legislation, we are taking further steps to facilitate this regime, based on emerging experience. At this stage, we are engaging with several companies who are seeking to shift their core locations to South Africa based on the revised legislation.
Yet another relief is in respect of transfer duty. It is well known that the real estate sector has been under pressure due to the global recession, with many households struggling to find the necessary deposits to acquire a home. The Bill provides relief for these would-be homebuyers by reducing transfer duty rates. Home purchases of up to R600 000 are now completely exempt from transfer duty. This is R100 000 more than what it used to be. Home purchases between R600 000 and R1 million will now also be subject to a 3% charge as opposed to 5% previously.
In conclusion, the tax Bills before you contain a balanced package. On the one hand, these Bills contain many fiscal measures that seek to facilitate growth by alleviating the burden on ordinary working citizens and by removing tax blockages that impede legitimate commercial goals. On the other hand, these Bills also take aim at aggressive tax practices, such as the misuse of section 45, that seek to shift large amounts of revenue indirectly from the fiscus for the benefit of a few members of the corporate elite.
In closing, I would like to thank the Chairperson of the Standing Committee on Finance, Mr Mufamadi, and the committee for their constructive role in processing these Bills. Their involvement ensures that issues are aired openly and constructively so that all voices are heard. These Bills fully reflect those inputs.
Hon Chairperson, hon members, Minister and Deputy Minister, Treasury family present here, and representatives from the SA Revenue Service, Sars, let me say that throughout the world, large and small economies, and big and small countries have come to realise that taxation or revenue collection is the key and critical element that determines the independence or sovereignty of every state because it is through the budget that the aspirations of every citizen can be realised. Therefore, the budget, as always, is nothing but an expression of a political will and commitment to address the challenges of society at hand. It is through taxes that governments are able to meet their core objectives and promote the welfare of each nation.
It is therefore not surprising that changes to the taxation laws are an integral part of the budget proposals presented in this House at the end of every financial year. The Taxation Laws Amendment Bill was tabled during a very difficult economic period internationally, characterised by uncertainty in the European economies and slow economic recovery in the United States.
As I speak today, the situation remains even more precarious and complex, particularly in what has become known as the Eurozone, and should these challenges persist, the projections in the Medium-Term Budget Policy Statement and the fiscal framework may be seriously impacted upon. Therefore our projected growth, revenue collections, and the economic functioning of our country generally may experience serious setbacks. This will have negative consequences and a negative bearing on our ability to bear and meet our targeted revenue expectations. It is here, hon members, that we should implore National Treasury and Sars, in particular, to take note of the recent comments and economic growth projections by the Reserve Bank, which further suggests that we may not meet the set objectives presented in the Medium-Term Budget Policy Statement and the general economic outlook.
Let me take this opportunity to welcome the positive assessment of our economic policies by the IMF Article IV Report, as reported in today's Business Day. What is of critical importance about this report is that it confirms the appropriateness of our countercyclical fiscal policies and approach and the monetary stance that the Reserve Bank in particular has taken around inflation targeting.
Furthermore, we should welcome the reaffirmation by the same institution that South Africa is both politically and economically stable and therefore - like our counterparts and sister nations in Brazil, Russia, India, and China in Brics - we pose no economic threat in the global economic environment. This is in direct contrast to the view of the international rating agency, Moody's, which perceives South Africa as politically unstable. We concur fully with their observation that the greatest threat to our economic stability is more from external shocks or economic challenges, and therefore we need to develop a comprehensive response to deal with the external shocks - or what is commonly known in economics as exogenous factors - in our economy.
The Article IV Report confirms what we've always believed, in that it says the challenges we face as South Africa, in the main, have very little to do with our ability to manage our internal affairs but much with what the developed economies or developed countries failed to manage in their own areas.
The Taxation Laws Amendment Bill before us introduces significant changes and new measures to address quite a number of issues, among others, broadening the tax base in support of inclusive growth; raising sufficient revenue to finance government programmes and projects; providing tax relief for individuals; tax breaks to support employment creation and skills development; closure of tax loopholes to sustain a broad tax base; and the introduction of significant changes that require companies to pay more attention to matters at board level.
Hon members, I wish to repeat the words of Sheldon Cohen, a former Commissioner of the American Internal Revenue Services, when he said that:
People think that taxation was a terribly mundane subject. But what makes it fascinating is that taxation, in reality, is life. If you know the position a person takes on taxes, you can tell their whole philosophy. The tax code, once you get to know it, embodies all the essence of life: greed, politics, goodness, charity. Everything's in there. That's why it's so hard to get a simplified tax code. Life just isn't simple ...
Now that we understand the importance of taxation in our lives and are probably less understanding of the pain of not being able to pay tax, I think the time has come to embrace the spirit of Lord Thomas Dewar, a Scottish whisky distiller, who said, "The only thing that hurts more than paying an income tax is not having to pay an income tax." What he means by this is that there's no pain worse than being unable to pay your taxes because you are economically inactive or underemployed, and therefore your human dignity is completely exorcised.
So, hon members, the amending Bill enjoins us in our private and collective being as companies and individuals to support the initiatives by National Treasury and Sars, in particular, to contribute towards the betterment of our fellow countrymen and women.
What Sheldon Cohen once said - that it is hard to get a simplified tax code because life is not simple - is also true of the administration and implementation of tax laws. This is a question that Sars in particular must continue to reflect on. Hon members, it is important to highlight that public interest and participation in tax matters still remain the province of the few. This is a clear reflection that the economy is not yet fully integrated and shared by all in this country.
In our public hearings, many of the biggest concerns raised were regarding section 45, which affects mostly businesses. As a committee, we congratulate National Treasury and Sars, in particular, for their willingness to engage openly with affected parties to find an amicable resolution to the challenges raised during our public hearings. This spirit should remain and it should continue to be the bedrock to resolve the remaining challenges that may be encountered by companies as we move forward during the administration of this Act.
In conclusion, the committee noted that the Taxation Laws Amendment Bill provides, among others, a good basis for the following: personal income tax relief; third rebate for aged individuals over the age of 75; and an increase in the turnover tax exemption threshold for microbusinesses. This will help us to respond to the challenges of the creation of new firms and new jobs in the economy, South Africa's role in regional economic integration, and the new anti-avoidance tax.
It is important to acknowledge and appreciate the success stories of Sars under the leadership of Ntate Oupa Magashule, together with his team, and, of course, under the tutelage and guidance of the Minister of Finance and his deputy. Most importantly, let me take this opportunity to thank the committee members for their dedication and the speed with which they have handled matters before the committee.
Hon members, as the ANC, we are convinced and confident that this taxation Bill will support the programmes that have been espoused and reflected in our various election manifestos, both in local and national government. As I leave this podium, I wish to remind hon members of what Benjamin Franklin said on tax matters:
Friends and neighbours complain that taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay, we might the more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly.
I thank you. [Applause.]
Chairperson, in March last year, the DA supported the revenue proposals for 2010-11 and said that we would very closely monitor the direction of the numbers on the fiscal framework and the policies that influence them. The taxation laws cannot be viewed in isolation. They give effect to the revenue proposals of national government as set out in the national Budget tabled in February, and any adjustments tabled in the Medium-Term Budget Policy Statement in October.
In October last year, the DA said that government intervention was required to increase economic activity, rather than the size and influence of government and its associated cronies. The very clear difference between the incoherent national government economic policy that claims to be in pursuit of the so-called developmental state and that of the DA lies in our fundamental belief in the individual's freedom to choose. In an open- opportunity society for all, everyone can walk along a path to become everything that they are capable of being. For this to happen, we need a society centred on people, where fiscal policy is designed to lift our people out of poverty along a path of increasing prosperity over successive generations.
The Taxation Laws Amendment Bill amends 10 tax laws in a fairly hefty and complex Bill with a large number of cross-references. The DA has long held the view that our taxation laws are overly complex and complicated and that a simplification process is required. We are pleased that this process has begun with the Tax Administration Bill and believe that this programme should be accelerated and be given a specific deadline for completion.
This year's deliberations on the taxation laws before the Standing Committee on Finance started off on the wrong foot with the poorly thought- through intention of the National Treasury to implement a so-called suspension of section 45 of the Income Tax Act. The DA was and is of a view that a law cannot be suspended at the whim of any government department, especially not when the unintended consequence has a significant impact on regular economic activity. It is the role of Parliament to repeal laws that don't work properly. The outcome of the so-called suspension was that merger and acquisition corporate activity ground to a halt and sent out a signal across the world that doing business in South Africa is risky and uncertain.
There is no doubt that the good intention of the National Treasury was to plug the massive leakage from abuse of section 45. Although its approach was wrong, its response to the massive outcry from innocent bystanders was appropriate and it is pleasing to see that the amendment to section 23(k) of the Income Tax Act appears to have solved the problem.
The Taxation Laws Amendment Bill makes several amendments to income tax from employment, individuals and savings, income tax on international activities, value added tax, transfer tax and securities transfer tax. Our view is that amendments to the tax tables to provide partial relief for bracket creep don't go far enough and should have fully compensated, given the very difficult financial circumstances of many South African households.
The conversion of medical scheme contribution deductions to tax credits, apparently in preparation for the introduction of a national health insurance scheme, requires further clarification. We agree that a credit is probably more equitable, but there is uncertainty on how the current unlimited deductions for taxpayers aged over 65 and the disabled will be accommodated after the two-year period where this will continue to be an allowable deduction. Given the current uncertainty over the funding model for the looming national health insurance and the financial implications for the most vulnerable members of our society, a more detailed explanation is required.
It also appears that tax-free transfers from provident funds, provident preservation funds and retirement annuity funds to pension preservation funds is a preparatory step in the seemingly never-ending process of retirement fund reform. Several amendments have been made over time to the taxation regime applicable to pension funds and clarity is required on intentions to introduce compulsory preservation. Fringe benefit taxation on employer contributions to retirement funds contradicts the development of a savings culture.
The Taxation Laws Amendment Bill falls short of content that we believe is necessary to resolve the problems of poverty and unemployment. It should have included a wage subsidy incentive to encourage entrepreneurial activity and the development of small and medium enterprises, changes to funding for the acquisition of skills, zero-rating VAT on books, and incentives for domestic savings.
Given the low-growth fiscal policy structure that underlies the revenue proposals now reflected in the Taxation Laws Amendment Bill, the DA will not support this Bill. We will, however, support the Taxation Laws Second Amendment Bill that amends two Acts and provides for a committee to be appointed to approve research and development under subsection 9 of the Income Tax Act. We also support the appropriate protection of company information as detailed in the Bill.
The DA did not support the fiscal framework because the policies underlying the numbers were not sustainable, especially now that government is the largest so-called job creator in our economy. As its size in the economy grows, government crowds out real and sustainable growth-generating activity. There is no fiscal space available for government patronage in a bloated bureaucracy under any circumstances, and especially not when it expects hardworking taxpayers to pay for it.
There is much that government can do about our economic woes that won't cost any money. It can stop the noise on nationalisation and expropriation without compensation, and it can stem the haemorrhage in the public financial system that now costs our people R30 billion per annum. But political will is required to do this, and our national government doesn't seem to have any.
The DA believes that government can unlock the enormous potential of our economy and our people through appropriate economic policy. We hope to see evidence of this when the national Budget is tabled in February 2012. This appears to be increasingly unlikely, but we do remain hopeful. [Applause.]
Chairperson, unfortunately this year's debate and public hearings were overshadowed by the debate around section 45.
Hon Chairperson, on a point of order: Opposition parties normally have us believe that everything we read in the press is factual. Today the hon Koornhof was quoted as an ANC MP. So, is he speaking in the right slot?
Hon member, that is not a point of order. The hon Koornhof of Cope is addressing us.
Maybe he referred to my second cousin, Gerald Koornhof. Maybe the newspapers were wrong. Nevertheless, the debates were overshadowed, unfortunately, by section 45. For a tax system to operate in a way that is credible, business and individuals need to be able to conduct their affairs with a reasonable degree of certainty regarding the tax consequences of their decisions. The way in which section 45 was introduced destroyed that credibility.
I echo the hon George's remarks about this issue. The outcome was good, but Treasury and the SA Revenue Service, Sars, dented their impeccable track record in the way this was introduced. A refrain that came from many of those who submitted comment was that the period from the initial release of the legislation to the deadline for the submission of representations was insufficient. During the public participation process, taxpayers and those who represent them had one single opportunity to present their perspectives. That is unfair.
The volume and the complexity of the proposed amendments warrant the request that we take a little more time on this - even Business Day echoes that today. There should be a rebuttal hearing before the committee after National Treasury has presented the response document. This will not only assist committee members but will allow for a more credible process. In addition, almost 80% of our time was spent on section 45. The huge load of other amendments were not highlighted in a suitable way.
The legislation includes a number of tax benefits and must be welcomed, especially against the background of a shrinking revenue base - something that has the ability to bite our economy hard. Maybe we must be prepared, hon Minister, that next year this legislation will be totally different and hitting hard with all-new categories of tax.
Maybe the Minister of Finance can take Oscar Wilde's advice and add a new tax category. Seeing many of those sitting here in this House today, I would like to quote Wilde: "Rich bachelors should be heavily taxed. It is not fair that some men should be happier than others." Cope shall support both pieces of legislation.
Chairperson, similar to the Taxation Administration Bill, these two Bills contribute to the effective and justified collection and distribution of tax revenue. These Bills impact on every single registered taxpayer in South Africa, whether a natural person or not. It is therefore very important to determine and to monitor on a continuous basis whether the consequences will actually support economic development and job creation. We must keep in mind that increased tax collection should also be a product of an increased tax base and not just higher tax collection from existing taxpayers.
Voorsitter, die verandering van Suid-Afrika se kredietgradering deur graderingsagentskappe soos Moody's het 'n wesenlike effek op die handjievol belastingbetalers van Suid-Afrika. Die verandering van die Suid-Afrikaanse regering se kredietgradering van stabiel tot negatief kan en moet ten volle voor die deur van die ANC-regering gel word. Dit is as gevolg van faktore waaroor die ANC-regering volle beheer behoort te h. Ongeag of die regering daarmee saamstem of nie, die persepsie van beleggers word hierdeur negatief benvloed en die hor risikosentiment word verdiskonteer in hor kostes om geld te bekom en om besigheid te doen.
Die handjievol belastingbetalers is die grootste verloorders, want die gevolglike hor koste kan mos net deur hulle gefinansier word, veral as daar nie alternatiewe werkbare ekonomiese groeistimulante bestaan nie.
Die ondeurdagte en ongerepudieerde uitsprake deur Cosatu en die ANC- jeugliga oor nasionalisering, 'n onwerkbare grondhervormingsbeleid, asook die subjektiewe en ondeurdagte inmenging deur die regering in die werk van ons mededingingsowerhede in die Walmart-Massmart-samesmelting, staan sentraal tot hierdie negatiewe sentimente wat in die beleggerswreld ontstaan het, en dit het verseker 'n direkte impak op die hoeveelheid direkte buitelandse kapitaalinvesterings wat na Suid-Afrika vloei. (Translation of Afrikaans paragraphs follows.)
[Chairperson, the change in South Africa's credit rating by rating agencies such as Moody's has a real effect on the handful of taxpayers in South Africa. The change in the credit rating of the South African government from stable to negative can and absolutely must be laid at the door of the ANC government. This is the result of factors over which the ANC government should have full control. Irrespective of whether or not the government agrees, the perception of investors is negatively influenced by this and the higher risk sentiment is discounted in the form of higher costs for accessing money and for doing business.
This handful of taxpayers represents the greatest losers, since the consequent higher costs can of course be funded only by them, particularly where no alternative workable stimulants for economic growth exist.
The ill-considered and unrepudiated statements by Cosatu and the ANC Youth League concerning nationalisation, an unworkable land reform policy, as well as the subjective and rash meddling by government in the work of our competition authorities with regard to the Walmart-Massmart merger, stand at the centre of these negative sentiments that originated in the investment world, and this certainly has a direct impact on the number of direct foreign capital investments flowing to South Africa.]
The fiscal framework and policy should be supported by the best possible tax regime, which is focused on supporting our much-needed economic growth and development as well as exponential job creation. Vergelyk maar net die $30 miljard se buitelandse direkte beleggings wat na Angola gevloei het, teenoor slegs $10 miljard na Suid-Afrika. [Just compare the $30 billion worth of foreign direct investments that flowed to Angola with the mere $10 billion to South Africa.]
The important question must be whether especially the Tax Laws Amendment Bill will in fact facilitate the required outcomes.
Hon House Chair, hon Minister, Deputy Ministers present, hon members, comrades and honoured guests, sanibonani [good afternoon].
Taxation is an important element of the economy and the country's fiscal framework. Through taxation, the ANC-led government is able to execute some of its core policies. In general, government depends on taxes to provide basic services and ensure the welfare of its citizenry to the greatest possible extent.
The main purpose of the Taxation Laws Amendment Bill is to give effect to changes in rates and thresholds so that these items can formally go into effect at the start of the tax year or as provided in the 2011 Budget Review.
I will focus on some of these changes. To support inclusive growth and development, the Tax Laws Amendment Bill provides for further personal income tax relief through adjustments to personal income tax brackets and rebates amounting to R8,1 billion. It increases the tax-free interest- income annual threshold from R22 300 to R22 800 for individuals below 65 years and for individuals aged 65 and older from R32 000 to R33 000. A third rebate of R2 000 per year for taxpayers who are 70 or older is being introduced.
Even though the income tax system does not generally allow for deductions in respect of personal consumption, medical expenses still remain a notable deviation. The Bill gives effect to the 2011 Budget proposal to convert expenditures associated with medical aid contributions into tax credits. However, in view of comments received - that credits will adversely affect the elderly and the disabled who are currently eligible for an unlimited deduction for all medical expenses - taxpayers aged 65 years and older will continue to receive the unlimited deductions, irrespective of medical expenses for the next two years. The possibility of converting deductions relating to out-of-pocket expenses into a credit for those aged 65 years and older and for those with disabilities will be explored next year.
A need has also been identified to accommodate situations where a taxpayer is incurring medical expenditure in respect of immediate family for whom he or she is liable for care and support. This accommodation is especially prevalent where a member of the taxpayer's immediate family is disabled or elderly.
Extensive work has been done in the health sector, informed by the ANC's 10- point plan, which has been adopted by the government. These beneficial medical amendments is another achievement of the social transformation agenda of the ANC, based on the fundamental objective of building a fair and more equal, humane, people-centred, people-driven and caring society.
The basic philosophy for permitted transfers between retirement savings funds is to permit the transfer of less restrictive funds to equal or more restrictive funds. The amendments accordingly permit pension preservation funds to be additionally transferred from provident and provident preservation funds, as opposed to transfers solely from the pension and pension preservation funds.
Small businesses under the turnover tax system are subject to a low rate of tax on a gross basis without deductions. However, two years after the introduction of the turnover tax system - which seeks to encourage the informal sector and other small businesses to enter the tax system by lowering the barriers of entry associated with the normal income tax system - the objectives have not been realised. Only a small number of taxpayers have registered for the turnover tax, most of whom have migrated from the pre-existed registration under the normal income tax.
All of the reasons associated with these difficulties are still under examination. Certain design aspects of the turnover tax appear to be problematic. Most notably, the rate structure may be too high for many informal businesses.
The proposed de-linkage of the microbusiness turnover tax from the value- added tax is welcomed as vendors registered under the value-added tax may now freely register under the turnover tax. If these taxpayers believe that it is in their best interests to do so, they may just as well do that.
In this negative economic climate, many retrenched workers will try to start small businesses to survive. Many of these start-up businesses will be of the survivalist type and need the support of the government. The ANC government has therefore introduced the policies that will assist small businesses, which have been provided for in the new Companies Act as well as in the Taxation Laws Amendment Bill that I have alluded to earlier on. These provisions will also help to ensure that small, medium and micro enterprises, SMMEs, in distress are saved before they reach a state of insolvency and, ultimately, liquidation. The reason for the amendment to this incentive is that the government seeks to renew efforts to enhance the Industrial Development Zone regime. We realised that creating decent work, reducing inequality, and defeating poverty can only happen through a new growth path founded on the restructuring of the South African economy to improve its performance in respect of labour absorption as well as the composition and rate of growth. The ANC-led government is committed to forging systemic changes to mobilise domestic investment around activities that can encourage growth in employment-creating activities and create sustainable employment.
Broadening the tax base in support of inclusive growth; raising sufficient revenue to finance government; tax relief for individuals; tax breaks to support employment creation and skills development, including changes in personal income tax brackets and rebates - the so-called fiscal drag relief - as well as changes in some monetary thresholds; and the closure of tax loopholes, which was mentioned by my chairperson; and adjustments in specific excise taxes to address environmental and health concerns are the key objectives of the Taxation Laws Amendment Bill, which comes during a difficult economic period.
In conclusion, I wish to concur with the statement of the ANC Veterans League to the National General Council that high levels of unemployment, deepening poverty and growing inequality are acknowledged as the biggest challenges that we must confront as a collective. Our people can no longer stand the pain of poverty that has no end in sight. As we approach our centenary, we must do so with a sense of urgency and purpose. It also means that we must be decisive in dealing with our present challenges.
With these amendments, we are facing and dealing with the need for a special focus on those among us who, over the last 17 years, have not benefited from progress by experiencing an improved quality of life on a sustainable basis. Still, in closing, it is also surprising that the DA, without having reached the stage of discussing the Medium-Term Budget Policy Statement, MTBPS, and without even reaching the stage of listening to the national Budget Speech, have already declared that they will not support this Bill. It is indeed surprising and interesting that they already have first-hand information that is neither valid nor true.
Hon Chairperson, firstly, let me congratulate the chairperson of the standing committee, Mr Mufamadi, on graduating to the status of philosopher. I think many of the things he said about tax compliance is absolutely valid and I hope most South Africans will take these sentiments to heart.
The hon George has a habit of getting things wrong and he has once again done so, I'm afraid. The fiscal framework that we've put in the Medium-Term Budget Policy Statement, MTBPS, and indeed in the Budget as well, is a very credible framework. The International Monetary Fund, IMF, no less, in the context of huge instability around the world, has said we've made all the right decisions. Yet Mr George finds some incredible reason to say that we have an unsustainable fiscal framework.
We have a sound revenue base; we continue to broaden that base; we are not overtaxing South Africans; our tax policies are absolutely world class and uncontested - and yet the hon George finds reasons to say that this is not sustainable. I suppose some excuse has to be found for saying that they are going to be an opposition for the sake of opposition.
Section 45 seems of have taken up too much of the committee's time and it's also taken up too much of the House's time. Section 45 was necessary because not innocent bystanders but in fact vested interests were robbing the fiscus! We asked the question: Do we become innocent bystanders and allow the fiscus to be raided or do we put a stop to it?
It's a great pity that for some opposition means allowing themselves to be influenced by these vested interests. [Interjections.] That is a regrettable development, if one might say so. We want - and we have - a proud record of creating absolute certainty for business in South Africa, but if business goes wrong, we will not hesitate to act. If business is listening to advisors whose only task and responsibility is to collect a massive fee for undermining the fiscus, we will not allow that. So, the suspension was absolutely valid and it has produced tons of information that the Treasury and SA Revenue Service, Sars, can now look, which it could not access before. So, the action was absolutely right and justifiable.
The hon Koornhof also made reference to section 45. I respond to him in the same way as we did. But, hon Koornhof, the processes in Parliament are in the hands of your committee. I hope you will talk to your chairperson and resolve the process issues that you have raised. It's interesting that you quoted Oscar Wilde and asked for a new category of tax. I await any submissions you have in that regard.
Let me thank the hon Marais and hon Dubazana for their contributions. But, hon Marais, be assured that South Africa wants to create conditions - and all of us should join in this - so that we get more investment from South Africans and foreigners as well. Thank you very much for your participation, and for those of you who support the Bill, thank you for your support. [Applause.]
Debate concluded.
Taxation Laws Amendment Bill read a first time (Democratic Alliance dissenting).
Taxation Laws Second Amendment Bill read a second time.