Comment Sought on Fiscal Responsibility Bill

National Treasury

Proposed legislation designed to introduce fiscal rules aimed at containing national debt and debt service costs in South Africa is heading for parliament.

The Draft Fiscal Responsibility Bill has been drawn up by David Maynier, a Democratic Alliance member of parliament.

The private member’s bill will provide for:

•    a fiscal rule prescribing that, for each financial year from 2019/2020 to 2022/2023, consolidated net loan debt expressed as a percentage of GDP must not be more than it was the previous year;
•    a fiscal rule prescribing that, for each of the financial years from 2019/2020 to 2022/2023, aggregated government guarantees must not be more than they were for the financial year 2018/2019;
•    a review of the fiscal rules by the National Assembly every four years, beginning in 2023/2024 by either amending, renewing or terminating the fiscal rules by way of an Amendment Bill;
•    an exemption from the fiscal rules to be granted in respect of a specific financial year by the National Assembly upon application by the Minister of Finance, with good cause having been shown and on the recommendation of the Standing Committee of Finance; and
•    an annual Fiscal Responsibility Report to be tabled by the Minister of Finance at the same time as the budget being tabled, setting out whether the fiscal rules were complied with or not, together with reasons for those outcomes, and recovery plans in the event of a failure to comply with the rules.

Comment on the proposed content of the draft bill is invited within 30 days of the date of publication.

The plan is to table the draft bill in parliament during the second quarter of 2018.

Meanwhile, the South African Revenue Service (SARS) recently briefed parliament on illicit financial flows (IFF).

SARS wants to set up a multidisciplinary team to tackle IFFs and tobacco-related cases.

National treasury also briefed parliament on strengthening tax administration at SARS.

Treasury was busy clarifying various processes currently in place.

Sabinet Cape Town Office

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