Madam Deputy Speaker, hon members, may I firstly thank the chairperson of the standing committee, Mr Mufamadi, for his leadership during this very long and complex process, and indeed all the members from all the parties in the Standing Committee on Finance.
When the budget proposals were tabled in February 2009, there was some anticipation that there would be a downturn, but certainly not that we would end up in a recession. Nonetheless, the budget proposals were prescient; they are timely, and are still relevant to the current environment. It is a remarkable anticipation of some of the challenges that we have to deal with.
Mr Mufamadi made reference to historical context, which is not unimportant and often forgotten in our environment. The context is that South Africa, because of its history, has a narrow tax base. Part of what we have been able to do over the last 15 years is to broaden that tax base. But that journey has yet to be completed.
There are many people who are not taxpayers at the moment and would like to be and many more who need to declare all of their income in order that it can be taxable. That is the challenge that both law makers on the one hand and administrators within Sars on the other have as their brief.
Equally, as a society, we must congratulate ourselves. We have come a long way from where we were even 10 years ago in terms of tax compliance and the culture of compliance in South African. The revenue figures, notwithstanding the recession, in a sense reflect this improved compliance in our society, but there is again much more work to be done.
I want to complement the committee and the chairperson's comments about the various representations that they have had, but also to voice reservations. As the chairperson has pointed out, the committee is often subjected to interest groups pleading their cases as opposed to the general public so. One of the things that we and Parliament need to give attention to, is how not to just listen to special interest groups, but how to broaden the representation from society and make sure that we hear all of the interest groups that are before us.
Hon George has certainly pointed out that tax collecting in this particular environment is difficult. We would like to assure him that government understands this crisis, and the consequences of the revenue shortfall, and is committed to sustaining the current levels of spending. We have to do a lot on our side as government in order to make sure that we get the balance right between spending on the one hand and revenue on the other.
I want to assure him that the debate about luxury vehicles and so on is a poor substitute for an understanding that certainly all my colleagues in Cabinet have. We know that we are living in difficult times, that we have to lead by example and that we will quietly, and perhaps sometimes not so quietly, demonstrate over time that this commitment goes beyond just which car we choose, but in our fundamental review of how we spend money in South Africa, what kind of programmes are supported and which ones will be stopped, and in due course, ladies and gentlemen, we will certainly bring that to you.
As all the parties in Parliament, I hope we can work to ensure that we reorientate our thinking in this very difficult time, and that Parliament will hold all departments accountable for not just the car story, but in a broader sense for how we prioritise, delay certain things and how we cut out certain things in our programmes. I can assure the House that this has been a subject of conversation in Cabinet for quite a while now and we will be able to share the results of the work that we are doing shortly with Parliament as a whole.
We have a very profound commitment to ensuring that we spend wisely and frugally, but more importantly, that we get value for money. You will see that a lot of our attention, both in our public comments and elsewhere, is focused in that direction.
Hon Dr George is also correct in his reference to the Financial Services Board, FSB, and consumer education, but the one regrettable thing that one has to note is that consumer education should be the responsibility of those companies that make money from the consumers. Here we are, as government, nonetheless, contributing, in the form of a tax break, if you like, to encourage consumer education.
If we are to get knowledgeable taxpayers and citizens, then it is important that commercial enterprises not only invest in their own growth as a business, but also in educating citizens about what the rights, responsibilities and expectations from those companies should be.
I think we must note that the provisional tax system has been, if you like, "played" for a long time in that businesses tend to delay payments to Sars, which certainly, in the current climate, is something that is unacceptable. The "pay now, argue later" story, Dr George, has been around for some time. I think it is important again to note that this is a provision that is barely used by the South African Revenue Service. In fact, in terms of the criteria that are set out in the Bill, it needs to be used more. It is only used and should only be used in an environment where the taxpayers themselves have been at fault and show a repeated tendency not to comply with their commitments to the fiscus.
On the issue of carbon credits, Dr Koornhoof, you made a very valid point. I think this is only the beginning of South Africa's commitment to environmentally friendly policies and to balance the way in which we approach the environment on the one hand and development on the other. As we go on, we will look at other fiscal measures that are available to us to ensure that we get the right behavioural change, which will support our commitment to ensuring a better environmental context, both for ourselves and for people generally.
Dr Oriani-Ambrosini, as usual, I am afraid in as far as the film industry is concerned, we have a slight difference of fact. So we can meet afterwards. You can pay for coffee and I will give you the explanation. [Laughter.] But if you look at page 30 of the response document from the National Treasury and Sars, it was made very clear that the current dispensation from the Department of Trade and Industry, DTI, which gives grants to filmmaking companies remains in place - I think you must be careful not to mislead people; and, secondly, that the additional incentives that have been sought, need to be thought about very carefully.
Ladies and gentlemen and hon members, it is very important that we recognise that, in the recessionary climate that we find ourselves in, we are not in a position to throw away money through greater incentives. We have to control the manner in which tax expenditure actually occurs more carefully. Dr Oriani-Ambrosini, a similar argument would apply to the fuel levy as well.
Mr Swart, I have addressed the question of the "pay now, argue later" principle and I am sure that among certain interest groups, that will always be a subject of contention.
Hon Dlamini-Dubazana made a very valid point in terms of outreach programmes. If you look at the tome of legislation, it is an extremely complex piece of legislation and one that is not easily understood. It is not complex because the SA Revenue Service and the National Treasury made it complex; it is complex because we have to respond by way of legislation to very complex phenomena that are taking place around us.
The point that has been made by the hon member in terms of outreach programmes is an extremely important one for both Parliament and ourselves to actually respond to. With the limited resources that we have, we will see how we can commit ourselves to this. May I thank all the parties and members for their support for these Bills. Keep on paying your taxes. The tax deadline is coming up. Thank you very much. [Applause.]
Debate concluded.
Taxation Laws Amendment Bill read a first time. Taxation Laws Second Amendment Bill read a second time.