Constitution of the Republic of South Africa, 1996/2002-04-26/Chapter 13

Treasury control

National legislation must establish a national treasury and prescribe measures to ensure both transparency and expenditure control in each sphere of government, by introducing —

generally recognised accounting practice; uniform expenditure classifications; and uniform treasury norms and standards.

The national treasury must enforce compliance with the measures established in terms of subsection (1), and may stop the transfer of funds to an organ of state if that organ of state commits a serious or persistent material breach of those measures.

A decision to stop the transfer of funds due to a province in terms of section 214(1)(b) may be taken only in the circumstances mentioned in subsection (2) and —

may not stop the transfer of funds for more than 120 days; and may be enforced immediately, but will lapse retrospectively unless Parliament approves it following a process substantially the same as that established in terms of section 76(1) and prescribed by the joint rules and orders of Parliament. This process must be completed within 30 days of the decision by the national treasury.

Parliament may renew a decision to stop the transfer of funds for no more than 120 days at a time, following the process established in terms of subsection (3).

Before Parliament may approve or renew a decision to stop the transfer of funds to a province —

the Auditor-General must report to Parliament; and the province must be given an opportunity to answer the allegations against it, and to state its case, before a committee.

Procurement

When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.

Subsection (1) does not prevent the organs of state or institutions referred to in that subsection from implementing a procurement policy providing for —

categories of preference in the allocation of contracts; and the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination.

National legislation must prescribe a framework within which the policy referred to in subsection (2) must be implemented.

Provincial Revenue Funds

There is a Provincial Revenue Fund for each province into which all money received by the provincial government must be paid, except money reasonably excluded by an Act of Parliament.

Money may be withdrawn from a Provincial Revenue Fund only —

in terms of an appropriation by a provincial Act; or as a direct charge against the Provincial Revenue Fund, when it is provided for in the Constitution or a provincial Act.

Revenue allocated through a province to local government in that province in terms of section 214(1), is a direct charge against that province’s Revenue Fund.

National legislation may determine a framework within which —

a provincial Act may in terms of subsection (2)(b) authorise the withdrawal of money as a direct charge against a Provincial Revenue Fund; and revenue allocated through a province to local government in that province in terms of subsection (3) must be paid to municipalities in the province.

Provincial taxes

A provincial legislature may impose —

taxes, levies and duties other than income tax, value-added tax, general sales tax, rates on property or customs duties; and flat-rate surcharges on any tax, levy or duty that is imposed by national legislation, other than on corporate income tax, value-added tax, rates on property or customs duties.

The power of a provincial legislature to impose taxes, levies, duties and surcharges —

may not be exercised in a way that materially and unreasonably prejudices national economic policies, economic activities across provincial boundaries, or the national mobility of goods, services, capital or labour; and must be regulated in terms of an Act of Parliament, which may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.

Provincial loans

A province may raise loans for capital or current expenditure in accordance with national legislation, but loans for current expenditure may be raised only when necessary for bridging purposes during a fiscal year.

National legislation referred to in subsection (1) may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.