Tag: government

Source: MyBroadband

The Department of Environment, Forestry and Fisheries (DEFF) says it has revoked a section 30A directive granted to Karpowership SA Pty Ltd for activities linked to the emergency generation of electricity.

When the company had initially submitted its request, it had indicated that the country’s electricity supply was under threat because of the increased pressure on the healthcare system as a result of the COVID-19 outbreak.

The motivation for the request was to ensure an uninterrupted supply of energy to the healthcare sector, something which Eskom was unable to guarantee.

The department verbally approved the request on 26 June 2020. Following receipt of confirmation that all environmental requirements would be met, the directive was confirmed in writing on 6 July 2020.

“It has subsequently emerged that the company had applied for the verbal directive in advance, in preparation for the possible implementation of the government’s integrated resources plan and in the event that the company would be selected as an emergency power producer.

“However, this information was not disclosed to the department when the company motivated for the verbal directive to be issued for the Section 30A activities, which are, in essence, an emergency provision,” the Department of Environment, Forestry and Fisheries said in a statement.

“In light of the fact that it has now emerged that there was in fact no emergency situation, the department has withdrawn the verbal authorisation and subsequent written directive for the commencement of activities listed in terms of Section 30A of the National Environmental Management Act on 13 August 2020,” the department said.

The company has since accepted the notice and indicated that it does not intend to challenge the department’s decision to revoke the verbal directive.

 

Telkom loses special BEE status

Altron has won a major court victory against Telkom and its subsidiary BCX in a tiff about the telecommunications company’s controversial black economic empowerment (BEE) status.

Rob Davies, minister of trade and industry in 2019, declared Telkom as a BEE Facilitator.

The BEE legislation makes provision for organs of state to be declared BEE Facilitators, and the effect is that such an organ of state will then be regarded as 100% black-owned, even if it is not.

Altron and other businesses objected to this on the basis that Telkom, and more specifically, BCX, will obtain an uncompetitive edge over private businesses that compete with it if the application succeeds.

In spite of the objections, Davies approved the application and granted Telkom BEE Facilitator status at the beginning of May 2019.

Strangely, although Telkom brought the application, the final decision of the minister reads that the BEE Facilitator status is granted to government, represented by the Office of the Presidency, in respect of government’s 40.5% shareholding in Telkom.

Altron was of the view that the minister’s decision was flawed, both from a procedural and substantive perspective, and it decided to take the minister’s decision on review to the High Court.

MTN joined Altron in the application, with the minister, Telkom and BCX opposing the application.

Chris Potgieter, Altron group executive for legal, following the ruling: “Altron took a decision to take this matter on review because we believe that the minister’s decision to grant the BEE Facilitator status was procedurally and substantively wrong and was contrary to the spirit of the BEE Codes.

“The result of the BEE Facilitator status approval was that Telkom and its BCX subsidiary obtained an unfair advantage over their business competitors through the resultant increase in Telkom’s and especially BCX’s BEE levels, without them having to take the corporate actions and having to incur the costs which other companies have to do in order to improve their BEE status.”

According to Potgieter, MTN joined Altron in the review application and Vodacom was mentioned as it, as a telco, had a vested interest in the matter.

“Altron welcomes the judgment as it shows that government is bound to follow fair and correct procedures and it takes away the unfair competitive advantage that Telkom and BCX obtained,” he says.

Meanwhile, Telkom tells ITWeb: “In compliance with the decision by the Gauteng High Court to set aside the minister of trade and industry’s decision to grant facilitator status to the government in respect of the government shares in Telkom SA, Telkom and certain of its subsidiaries have included the impact of the judgment in their revised B-BBEE certificates.”

Where required, it says, other subsidiaries have applied for re-verification of existing certificates.

“Telkom is pleased that the court’s decision will not be implemented retrospectively. In setting aside the minister’s decision, the court said the ruling will not affect the B-BBEE status of Telkom and its subsidiaries for the purposes of any tender or contract awarded and/or concluded after 7 May 2019 and before the judgment date (8 July 2020).”

According to Telkom, tenders and contracts concluded during this period will retain the facilitator status until the end of the terms of these contracts.

SA to miss tax target by over R300bn

By Lameez Omarjee for Fin24

SA will miss its original tax revenue target by over R300-billion this year, said Finance Minister Tito Mboweni.

During the tabling of the special adjustment budget on Wednesday, the minister explained that the country is already behind its 2020/21 tax revenue target by R35.3 billion. As a result, government has revised down the tax revenue target from R1.43 trillion to R1.12 trillion.

National Treasury recorded a R63.3 billion revenue shortfall in the 2019/20 tax year.

“We expect to miss our tax target for this year by over R300 billion,” Mboweni said.

While Mboweni did not announce any tax hikes to make up the shortfall, he said that tax measures of R40 billion would be needed over the next four years. Tax proposals will be announced in the 2021 budget.

Furthermore Treasury will work to find spending adjustments of R230 billion over the next two years.

He also touted the idea of zero-based budgeting. “This means that we will try to reduce all expenditure that we thought we can no longer afford. After all, we are not as rich as we were ten years ago,” Mboweni said.

Analysts had expected the budget to reveal a significant shortfall as a result of the lockdown which restricted economic activity and by extension tax revenue collections.

To cushion the blows of the lockdown on consumers and businesses, government implemented a R500 billion stimulus package, which included R70 billion in tax relief measures. These entailed deferrals on some tax payments such as excise duties, carbon tax and employee taxes. Government also opted to postpone tax proposals for corporate tax hikes and SARS was directed to fast track VAT refunds. Donations to the Solidarity Fund, set up to support the vulnerable in society, were also declared tax deductible.

A ban on cigarette and alcohol sales also had negative implications for excise duty collections. Back in April SARS Commissioner Edward Kieswetter said these restrictions saw a loss of R1.5 billion in excise duties. The minister has also been outspoken about his opposition to the ban on these items.

Bernard Sacks, tax partner at Mazars, noted that certain sectors of the economy had still not been able to restart operations, while some others are operating to a limited extent.

“The difficulties faced by Minister Mboweni are now immeasurably greater. Ways must be found to fund the steep rise in healthcare spending… Social grant spending will show steep increases as the unemployment rate soars even higher,” Sacks said.

By Edward West for IOL

In just over a month since the R200 billion Covid-19 Loan Guarantee scheme to help small and medium sized businesses was launched, only R7-billion has been paid out – according to figures from the SA Banking Association (Basa) released yesterday.

The scheme, managed by the banks on behalf of National Treasury and the SA Reserve Bank (SARB), allows qualifying companies to apply for loans from their primary bank to fund three months operating costs, such as salaries, rent and supplier payments.

Economic commentators have criticised the scheme, arguing in particular that banks have applied normal risk vetting procedures for the loans, which were too stringent considering the plight many small businesses found themselves in and the uncertain trading environment in the future.

For instance, financial intelligence and research firm Intellidex noted on Wednesday: “The R200bn guaranteed loan scheme is a crucial centrepiece of “phase two” of the economic response to the Covid-19 crisis and is now one month old. Take-up, however, has been low.”

Basa said yesterday that the banks had approved just more than R7 billion in loans for 4 800 small businesses, since the scheme was launched mid-May.

Basa said, however, they expect the approval amount to grow as the number of applications for loans continues to increase. As at June 6, banks had received 29 700 applications for the loans.

The banks had rejected some 5 200 applications as they did not meet the eligibility criteria, as set out by National Treasury and the SARB.

Five thousand two hundred applications were also declined because they did not meet bank risk criteria.

However, about 14 100 applications were still being assessed, while 200 loans were approved, but not taken up by the applicants, Basa said.

Basa said the Covid-19 loan scheme was a commercial arrangement and required a credit approval process, to ensure that banks did not lend recklessly and to protect the fiscus,

“Business owners may be required to sign surety, based on individual bank credit processes.

In addition to the Loan Guarantee Scheme, in the two weeks to June 6, Bas members approved another R2bn in voluntary debt relief to individual customers experiencing financial distress due to the pandemic.

This brought the cumulative relief offered by banks since they started assisting individuals with targeted relief, to R16.5bn.

In the two weeks to June 6, the banks also provided additional cash flow relief, including payment breaks, to commercial and small and medium enterprises worth R1.4bn. This brought the cumulative assistance offered by banks to commercial and small and medium enterprises to R11.7bn.

Of the 131 600 applications received for relief from commercial and small and medium enterprises, more than 124 400 had already received assistance, Basa said

The cumulative assistance offered to individuals and commercial and small and medium enterprises businesses amounted to R28.2bn.

Source: eNCA

The COVID-19 lockdown alert Levels 3 and 4 have been declared invalid and unconstitutional.

The High Court in Pretoria has handed down this judgment.

The court, however, suspended the declaration of invalidity for a period of 14 days.

Government has noted the decision and says the Level 3 regulations remain in operation for now.

The court has directed Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma to amend and republish the regulations.

It says the regulations should guarantee the rights enshrined in the Bill of Rights.

Liberty Fighters Network had taken government to court, arguing the rules are unconstitutional.

Cabinet says it’ll make a statement once it’s fully studied the judgment.

By Nozipho Mngomezulu, Karl Blom and Jody Hardy at Webber Wentzel

In a move to counter “fake news”, all Internet sites ending with “.za” will have to include a visible link on their landing page to the Covid-19 South African Online Portal, in terms of a Government Gazette notice published by the minister of communications and digital technologies on 26 March 2020.

This applies to all websites operating under the .zaDNA top-level domain name, so it includes those ending with “co.za”, “org.za” and “ac.za”.

The requirement is contained in the Electronic Communications, Postal and Broadcasting Directions, under Regulation 10(8) of the regulations made under section 27(2) of the Disaster Management Act, 57 of 2002.

The purpose of this directive is to disseminate and facilitate the availability of accurate information about Covid-19.

The Covid-19 South African Online Portal contains statistics on the spread of the virus, information on symptoms and preventative tips, and official press releases and notices.

Although the directions came into force on the date of publication, they do not prescribe any penalties for non-compliance, or a deadline by when websites must be updated.

The portal to be displayed is found here.

Sanral cancels e-tolls tender

By Roy Cokayne for Moneyweb

The SA National Roads Agency (Sanral) has cancelled the tender it issued in August last year for the continued management of e-tolls and claims it has not been informed of any decision by the government on the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP).

Sanral has also confirmed that it intends to reissue the tender.

Vusi Mona, general manager of communications at Sanral, confirmed on Friday that Sanral’s board had decided to cancel the tender and stressed that Sanral has not been informed of any decision in regard to the future of e-tolls.

“The board’s decision to cancel the tender was informed by a review of the assurance documents from Sanral’s legal and internal audit departments, as well as expert advice provided by the independent advisor to the board’s audit and risk committee.”

The cancellation of the tender, which was in the process of being adjudicated, follows Sanral confirming on March 12 that its contract with Electronic Tolling Collections (ETC) for the management of e-tolls on the GFIP had been extended until December 2020.

One of the reasons cited by Sanral for that extension was to allow for the tender process to be concluded.

ETC’s contract was also extended for three months in December last year, with this extension expiring at the beginning of this month.

Mona said the current ETC contract allowed for an up to 24-month extension.

“In December 2019, Sanral extended the ETC contract for three months to finalise the tender process.

“The Sanral board then took the decision to cancel the tender. Based on this decision, the current ETC contract was extended for a further nine months to allow for completion of the retendering process.

“The tenderers were also informed of the cancellation,” he said.

‘Smoke and ambiguity’

On the weekend, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage described the cancellation of the tender as “lots of smoke, lots of ambiguity and a lack of clarity,” adding that “nothing makes sense”.

He said it seemed that an announcement on the future of e-tolls was imminent last week, before the government’s announcement on Covid-19.

“Obviously with the virus, it has been put off and I think there are more important things to deal with right now.

“So it is again a case of wait-and-see and kicking the can down the road some more, with compliance continuing to drop,” he said.

Paying motorists getting frustrated

Duvenage believes people who are paying their e-tolls are getting frustrated with the fact that only one in five are paying their e-tolls and he called on them to stop paying.

“That will end it sooner [rather] than later,” he said.

Duvenage believes Sanral has scrapped the tender process more out of a decision to wait and see what government is going to do about e-tolls.

“These are all indications that the end is nigh. If the government is going to carry on with e-tolls, Sanral has another nine months to retender.”

The problem is that Sanral cannot enforce compliance anymore, adds Duvenage.

“They have stopped summoning for over a year; the test case is in the balance and by putting that test case on hold, they have effectively done a lot of damage to the strength of their case,” he said.

Moneyweb reported last year that Duvenage claimed Kusa Kokutsha, which submitted a bid of R7.548 billion for the tender, was allegedly only registered as a business days after the tender was first advertised and appeared to have been set up specifically to bid for the Sanral contract.

The other two bidders, according to Outa, were Phambili joint venture (JV) and SAeTO.

It said Phambili JV submitted a bid of R11.399 billion while SAeTO did not list a bid amount.

Duvenage added at the time that the date on which Kusa Kokutsha was registered indicated that it did not have a track record as a business and, through its directors, is linked to outgoing contractor ETC.

“Thus this appears to be ETC in a new guise,” he said.

Douglas Davey, ETC board chair, subsequently confirmed that ETC did not submit a bid for the tender because it is a special purpose vehicle and was therefore established only to manage and operate the Gauteng tolling system.

However, Davey said Kusa Kokutsha, in which TMT Services and Supplies has a 44% shareholding and KapschTrafficCom AG a 5% stake, did submit a bid.

The majority shareholder in Kusa Kokutsha is a staff trust, with a 51% stake in the company.

ETC’s original shareholders were TMT and Austria-based Kapsch TrafficCom AG.

Only part of the tender Sanral issued for an open road tolling system in Gauteng – a national Transaction Clearing House (TCH) and violations processing centre – relates to e-tolls on the GFIP.

The TCH is currently almost exclusively used for clearing e-toll collections for various toll operators and toll plazas but Sanral confirmed that it is in the process of repackaging and expanding the function of its TCH to provide a host of other mobility services, such as vehicle licence renewal payments, cashless parking, fuel payments and to use Sanral’s customer service centres for driving licence renewals.

Covid-19: SA in shutdown

On Sunday night, President Cyril Ramaphosa announced a number of strict measures to help reduce the spread of coronavirus in South Africa.

The highlights of his address are as follows:

  • A National State of Disaster has been declared
  • A travel ban from foreign nationals from high-risk countries will be implemented from Wednesday 18 March
  • SA citizens are advised to refrain from travel to or through high-risk countries. These are currently listed as Iran, China, South Korea, Spain, Italy, Germany, Switzerland, France, the UK and the USA. This is updated regularly
  • SA citizens returning from high-risk countries will undergo additional testing at ports of entry, and must self-isolate for 14 days
  • All foreign nationals who entered South Africa from high-risk areas must be tested. This applies to those who travelled from mid-February onwards
  • 35 land ports and two seaports will be closed
  • Non-essential travel is prohibited for all spheres of government
  • Gatherings of more than 100 people are prohibited. This includes concerts, sport events and celebrations
  • Schools will be closed from 18 March until after the Easter weekend. Creches and universities are expected to follow suit
  • Visits to all correctional facilities have been suspended for the next 30 days
  • All businesses must take measures to intensify hygiene control, and where possible workers are to be asked to work remotely
  • All shopping centres must take measures to intensify hygiene control
  • The capacity of health centres is being increased nationally
  • A national command council has been established, meeting three times a week, chaired by the President
  • Cabinet is working with the private sector to finalise a package of varying fiscal measures to prevent economic collapse

All citizens of South Africa are called upon to do the following:

  • Wash hands with soap or similar for 20 seconds. Do this regularly, especially after going out in public and touching typically dirty surfaces (e.g. hand rails, money, door handles, elevator buttons)
  • Sneeze or cough into the crook of the elbow, or into a tissue which is immediately discarded. Wash hands thereafter
  • Avoid close contact with those who have flu-like symptoms
  • Avoid shaking hands and hugging, and try to keep a one-metre distance from other people in public
  • Avoid spreading fake news. Check all your facts before sharing information
  • Avoid panic-buying, especially of items (e.g. gloves and sanitizers) needed by medically vulnerable populations in society
  • Practice social distancing. This involves staying within the confines of the home and avoiding going into public unless absolutely necessary
  • Quarantining / self-isolating for 14 days is necessary for all those experiencing flu-like symptoms. Seek testing should the following symptoms persist:
    • Fever
    • Dry cough
    • Sore throat
    • Breathing difficulties
  • Limit all forms of travel and social gatherings where possible
  • Where possible, avoid public transport
  • Where possible, work remotely and conduct meetings via digital platforms
  • If you believe you have Covid-19, you can:
    • E-mail the Department of International Relations and Cooperation (DIRCO) on cicc1@dirco.gov.za or cicc2@dirco.gov.za
    • Call DIRCO on 012 351 1754
    • WhatsApp 0600 123 456 and say “Hi”, and then follow the prompts
    • Call the National Coronavirus Hotline on 0800 029 999
    • Phone your GP and ask for advice
    • It is NOT recommended that you go to a medical facility without phoning ahead. This will prevent the spread of the virus, or your exposure to the virus

The 2020 Budget in a nutshell

By Alec Hogg for BizNews

Finance Minister Tito Mboweni delivered his Budget speech this afternoon.

The highlights are as follows:

  • No tax increases in the coming fiscal year beyond a modest rise in the fuel levy (25c a litre) and the usual increases in booze and smokes (4.4% to 7.5%). Electronic cigarettes (vapes) will be taxed from 2021.
  • There is fractional relief on personal income tax with the R12bn impact of fiscal drag being offered through a R14bn effective drop in inflation-adjusted tax rates. This net benefit of R2bn is to be funded through a carbon tax (R1.75bn) and a plastic bag levy (R250m) which is increased to 25c.
  • The annual contribution to tax-free savings accounts has been increased by R3,000 to R36,000 from March 1.
  • In a blow for tax planning and a mushrooming sector, Section 12I tax incentive relating to industrial policy projects will not be renewed beyond March 2020.

Loopholes and tax incentives for companies have been targeted in various ways:

  • Net interest expenses will be restricted to 30% of earnings after January 2021 in a specific measure to combat tax avoidance by multinationals.
  • Sunset clauses are being adopted on incentives dealing with airport and port assets, rolling stock and loans for residential units.
  • There will be no extension of tax benefits beyond the six Special Economic Zones already approved.
  • More than 18m people now receive social security payments. Their grants will increase by between R20 and R80 per month in the year ahead. A change in the way social security is administered has saved R1bn a year.

By Barbara Friedman for CapeTalk

Eskom’s new spokesperson Sikonathi Mantshantsha has acknowledged that the power utility’s workforce is bloated.

Speaking to CapeTalk radio, Mantshantsha – who was once the utility’s biggest critic – said that after the board changed in 2018, and many of those fingered for mismanagement or wrongdoing were axed or resigned, Eskom had a thorough look at the organisation’s make-up.

“The outcome was that as Eskom, we alone are not able to service this debt of R450-billion. We need the government to come in and pitch in some money.”

This resulted in Minister of Finance Tito Mboweni allocating R69-billion of the budget in three installments per annum. A staff audit was conducted and the outcome was that Eskom had 16 000 people more than was needed.

“The government said OK, don’t touch them. Focus on the power stations,” says Mantshantsha.
“The final call comes from the shareholder in all businesses. And in this case, the shareholder is the government.”

 

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