Chairperson, hon members, ladies and gentlemen, I stand here on behalf of the Select Committee on Finance to confirm that it was not by accident that on 18 September 2007, both the heads of state of Mozambique and the Republic of South Africa signed this treaty.
The Select Committee on Finance, having engaged the department on this treaty earlier this week, and in the course of the briefing and deliberations, the following realities were outlined and digested that this ratification tax treaty has the following pillars.
The first pillar is the policy that takes care of promoting economic growth by providing certainty in respect of cross-border investments. The same pillar goes further and prevents double-taxation of same income through provision of certainty on tax treatment as well as assignment of tax rights between member states.
I wish to inform hon members of this House that currently there are investment flows between the two countries. The committee was informed that South Africa has, by far, a larger investment into Mozambique and already, through the IDC, this country has further earmarked major investments.
The other pillar is the one of administration which takes care of facilitating exchange of information as well as processing mutual agreement procedures. Aspects like Articles 16, 17, 18, 19 and 20 vary.
This treaty has been ratified by a number of participating countries. However, it has been reported that Nigeria and DRC are still defaulters.
Hon Chairperson and hon members, I hereby wish to submit this tax treaty for approval so that it can be a binding document. I thank you, Chairperson. [Applause.]