[Title 1] General Financial Matters
Section 213 National Revenue Fund
(1) There is a National Revenue Fund into which all money
received by the national government must be paid, except money
reasonably excluded by an Act of Parliament.
(2) Money may be withdrawn from the National Revenue Fund
only -
(a) in terms of an appropriation by an Act of Parliament; or
(b) as a direct charge against the National Revenue Fund, when
it is provided for in the Constitution or an Act of Parliament.
(3) A province's equitable share of revenue raised nationally is a
direct charge against the National Revenue Fund.
Section 214 Equitable shares and allocations of revenue
(1) An Act of Parliament must provide for -
(a) the equitable division of revenue raised nationally among the
national, provincial and local spheres of government;
(b) the determination of each province's equitable share of the
provincial share of that revenue; and
(c) any other allocations to provinces, local government or
municipalities from the national government's share of that
revenue, and any conditions on which those allocations may be
made.
(2) The Act referred to in subsection (1) may be enacted only
after the provincial governments, organised local government and
the Financial and Fiscal Commission have been consulted, and
any recommendations of the Commission have been considered,
and must take into account -
(a) the national interest;
(b) any provision that must be made in respect of the national debt
and other national obligations;
(c) the needs and interests of the national government, determined
by objective criteria;
(d) the need to ensure that the provinces and municipalities are
able to provide basic services and perform the functions allocated
to them;
(e) the fiscal capacity and efficiency of the provinces and
municipalities;
(f) developmental and other needs of provinces, local government
and municipalities;
(g) economic disparities within and among the provinces;
(h) obligations of the provinces and municipalities in terms of
national legislation;
(i) the desirability of stable and predictable allocations of revenue
shares; and
(j) the need for flexibility in responding to emergencies or other
temporary needs, and other factors based on similar objective
criteria.
Section 215 National, provincial and municipal budgets
(1) National, provincial and municipal budgets
and budgetary
processes must promote transparency, accountability and the
effective financial management of the economy, debt and the
public sector.
(2) National legislation must prescribe -
(a) the form of national, provincial and municipal budgets;
(b) when national and provincial budgets must be tabled; and
(c) that budgets in each sphere of government must show the
sources of revenue and the way in which proposed expenditure
will comply with national legislation.
(3) Budgets in each sphere of government must contain -
(a) estimates of revenue and expenditure, differentiating between
capital and current expenditure;
(b) proposals for financing any anticipated deficit for the period
to which they apply; and
(c) an indication of intentions regarding borrowing and other
forms of public liability that will increase public debt during the
ensuing year.
Section 216 Treasury control
(1) National legislation must establish a national treasury and
prescribe measures to ensure both transparency and expenditure
control in each sphere of government, by introducing -
(a) generally recognised accounting practice;
(b) uniform expenditure classifications; and
(c) uniform treasury norms and standards.
(2) The national treasury, with the concurrence of the Cabinet
member responsible for national financial matters, may stop the
transfer of funds to an organ of state only for serious or persistent
material breach of the measures established in terms of subsection
(1).
(3) A decision to stop the transfer of funds to a province may be
taken only in terms of subsection (2), and -
(a) may not stop the transfer of funds for more than 120 days; and
(b) 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.
(4) 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).
(5) Before Parliament may approve or renew a decision to stop the
transfer of funds to a province -
(a) the Auditor-General must report to Parliament; and
(b) the province must be given an opportunity to answer the
allegations against it, and to state its case, before a committee.
Section 217 Procurement
(1) 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.
(2) Subsection (1) does not prevent the organs of state or
institutions referred to in that subsection from implementing a
procurement policy providing for -
(a) categories of preference in the allocation of contracts; and
(b) the protection or advancement of persons, or categories of
persons, disadvantaged by unfair discrimination.
(3) National legislation must prescribe a framework within which
the policy referred to in subsection (2) may be implemented.
Section 218 Government guarantees
(1) The national government, a provincial government or a
municipality may guarantee a loan only if the guarantee complies
with any conditions set out in national legislation.
(2) National legislation referred to in subsection (1) may be
enacted only after any recommendations of the Financial and
Fiscal Commission have been considered.
(3) Each year, every government must publish a report on the
guarantees it has granted.
Section 219 Remuneration of persons holding public office
(1) An Act of Parliament must establish a framework for
determining-
(a) the salaries, allowances and benefits of members of the
National Assembly, permanent delegates to the National Council
of Provinces, members of the Cabinet, Deputy Ministers,
traditional leaders and members of any councils of traditional
leaders; and
(b) the upper limit of salaries, allowances or benefits of members
of provincial legislatures, members of Executive Councils and
members of Municipal Councils of the different categories.
(2) National legislation must establish an independent commission
to make recommendations concerning the salaries, allowances and
benefits referred to in subsection (1).
(3) Parliament may pass the legislation referred to in subsection
(1) only after considering any recommendations of the commission
established in terms of subsection (2).
(4) The national executive, a provincial executive, a municipality
or any other relevant authority may implement the national
legislation referred to in subsection (1) only after considering any
recommendations of the commission established in terms of
subsection (2).
(5) National legislation must establish frameworks for determining
the salaries, allowances and benefits of judges, the Public
Protector, the Auditor-General, and members of any commission
provided for in the Constitution, including the broadcasting
authority referred to in section 192.
[Title 2] Financial and Fiscal Commission
Section 220 Establishment and functions
(1) There is a Financial and Fiscal Commission for the Republic
which makes recommendations envisaged in this Chapter, or in
national legislation, to Parliament, provincial legislatures and any
other authorities determined by national legislation.
(2) The Commission is independent and subject only to the
Constitution and the law, and must be impartial.
(3) The Commission must function in terms of an Act of
Parliament and, in performing its functions, must consider all
relevant factors, including those listed in section 214(2).
Section 221 Appointment and tenure of members
(1) The Commission consists of the following women and men
appointed by the President as head of the national executive:
(a) A chairperson and a deputy chairperson who are full-time
members;
(b) nine persons, each of whom is nominated by the Executive
Council of a province, with each province nominating only one
person;
(c) two persons nominated by organised local government in terms
of section 163; and
(d) nine other persons.
(2) Members of the Commission must have appropriate expertise.
(3) Members serve for a term established in terms of national
legislation. The President may remove a member from office on
the ground of misconduct, incapacity or incompetence.
Section 222 Reports
The Commission must report regularly both to Parliament and to
the provincial legislatures.
Section 223 Establishment
The South African Reserve Bank is the central bank of the
Republic and is regulated in terms of an Act of Parliament.
Section 224 Primary object
(1) The primary object of the South African Reserve Bank is to
protect the value of the currency in the interest of balanced and
sustainable economic growth in the Republic.
(2) The South African Reserve Bank, in pursuit of its primary
object, must perform its functions independently and without fear,
favour or prejudice, but there must be regular consultation
between the Bank and the Cabinet member responsible for national
financial matters.
Section 225 Powers and functions
The powers and functions of the South African Reserve Bank are
those customarily exercised and performed by central banks,
which powers and functions must be determined by an Act of
Parliament and must be exercised or performed subject to the
conditions prescribed in terms of that Act.
[Title 4] Provincial and Local Financial Matters
Section 226 Provincial Revenue Funds
(1) 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.
(2) Money may be withdrawn from a Provincial Revenue Fund
only -
(a) in terms of an appropriation by a provincial Act; or
(b) as a direct charge against the Provincial Revenue Fund, when
it is provided for in the Constitution or a provincial Act.
(3) 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.
Section 227 National sources of provincial and local government funding
(1) Local government and each province -
(a) is entitled to an equitable share of revenue raised nationally to
enable it to provide basic services and perform the functions
allocated to it; and
(b) may receive other allocations from national government
revenue, either conditionally or unconditionally.
(2) Additional revenue raised by provinces or municipalities may
not be deducted from their share of revenue raised nationally, or
from other allocations made to them out of national government
revenue. Equally, there is no obligation on the national
government to compensate provinces or municipalities that do not
raise revenue commensurate with their fiscal capacity and tax
base.
(3) A province's equitable share of revenue raised nationally must
be transferred to the province promptly and without deduction,
except when the transfer has been stopped in terms of section 216.
(4) A province must provide for itself any resources that it
requires, in terms of a provision of its provincial constitution, that
are additional to its requirements envisaged in the Constitution.
Section 228 Provincial taxes
(1) A provincial legislature may impose -
(a) taxes, levies and duties other than income tax, value-added tax,
general sales tax, rates on property or customs duties; and
(b) flat-rate surcharges on the tax bases of any tax, levy or duty
that is imposed by national legislation, other than the tax bases of
corporate income tax, value-added tax, rates on property or
customs duties.
(2) The power of a provincial legislature to impose taxes, levies,
duties and surcharges -
(a) 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
(b) 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.
Section 229 Municipal fiscal powers and functions
(1) Subject to subsections (2), (3) and (4), a municipality may
impose -
(a) rates on property and surcharges on fees for services provided
by or on behalf of the municipality; and
(b) if authorised by national legislation, other taxes, levies and
duties appropriate to local government or to the category of local
government into which that municipality falls, but no municipality
may impose income tax, value-added tax, general sales tax or
customs duty.
(2) The power of a municipality to impose rates on property,
surcharges on fees for services provided by or on behalf of the
municipality, or other taxes, levies or duties -
(a) may not be exercised in a way that materially and
unreasonably prejudices national economic policies, economic
activities across municipal boundaries, or the national mobility of
goods, services, capital or labour; and
(b) may be regulated by national legislation.
(3) When two municipalities have the same fiscal powers and
functions with regard to the same area, an appropriate division of
those powers and functions must be made in terms of national
legislation. The division may be made only after taking into
account at least the following criteria:
(a) The need to comply with sound principles of taxation;
(b) the powers and functions performed by each municipality;
(c) the fiscal capacity of each municipality;
(d) the effectiveness and efficiency of raising taxes, levies and
duties; and
(e) equity.
(4) Nothing in this section precludes the sharing of revenue raised
in terms of this section between municipalities that have fiscal
power and functions in the same area.
(5) National legislation envisaged in this section may be enacted
only after organised local government and the Financial and Fiscal
Commission have been consulted, and any recommendations of
the Commission have been considered.
Section 230 Provincial and municipal loans
(1) A province or a municipality may raise loans for capital or
current expenditure in accordance with reasonable conditions
determined by national legislation, but loans for current
expenditure -
(a) may be raised only when necessary for bridging purposes
during a fiscal year; and
(b) must be repaid within twelve months.
(2)National legislation referred to in subsection (1) may be enacted
only after any recommendations of the Financial and Fiscal
Commission have been considered.