Finance Minister Enoch Godongwana says efforts to procure the country off the grey list are well underway, with the Financial Intelligence Centre (FIC) allocated more than R265 million over the medium-term.
Delivering his Budget Vote speech in Parliament on Tuesday, Godongwana said that this forms fraction of the response measures to the recent placing of the country on the Financial Action Task Force (FATF) grey list.
“As section of the response measures to the recent placing of the country on the grey list, the Financial Intelligence Centre has been allocated additional funding of more than R265 million over the medium-term to implement the Financial Action Task Force’s recommendations and procure the country off the grey list,” Godongwana said.
Earlier this year, the Paris-based anti-money laundering watchdog added South Africa to its list of countries that will be monitored to ensure the implementation of anti-money laundering and terrorism funding regulations.
Godongwana said that government will implement the Financial Action Task Force’s recommendations, with his department providing periodic updates to Cabinet on pace.
Last year, the Minister said, government led an unprecedented process to pass an omnibus of statutory amendments that address the gaps in SA’s anti-money laundering regime.
“The National Treasury, as the lead in the Interdepartmental Committee on Anti-Money Laundering and the Combating of the Financing of Terrorism, continues to coordinate government-wide efforts to comprehensively address the remaining weaknesses in our legal scheme,” he said.
Godongwana said one of the many examples is the frozen assets of individuals and entities designated by the United Nations to be linked to ISIS, the Taliban and al Qaeda.
He said that they acquire updated and strengthened systems for supervising non-financial businesses that are at risk of being used for money laundering or the financing of terrorism.
“We believe also strengthened the systems needed to identify the beneficial owners of business and trusts, so that they cannot conceal behind the veil of corporate secrecy when engaged in money laundering.”
Godongwana said these updates acquire been submitted to the FATF and a positive re-ratings of the country’s technical compliance with FATF standards can be expected in the next six months.
Departmental budget
Godongwana announced that National Treasury has been allocated a total of R34.9 billion for the 2023/24 financial year.
“Because of the dire economic situation, urgent and considered actions are required. The Budget Vote of the National Treasury aims to contribute to fostering higher and more inclusive economic growth, address fiscal vulnerability and stabilise public finances. These are preconditions for addressing poverty and unemployment,” he said.
The Minister said 85% of the budget will be allocated for transfers and subsidies mainly to the South African Revenue Service (SARS), State Security Agency, conditional grants to municipalities and funding for Civil and Military pensions.
“The allocation to SARS is R12.2 billion and it is to support continued efforts to rebuild SARS. I am pleased to report that the efforts are bearing fruit.
“SARS has seen a net tax revenue growth of 7% per annum since 2019. Public trust in SARS has also increased from 48% in 2018 to 66% this year, whilst public attitude toward tax compliance is at 76.5%, Godongwana said.
Mending municipal finances
In relation to municipalities, Godongwana emphasised that decisive action is needed to restore the integrity of the sector.
“Unfunded mandates, overexpenditure and ineffective revenue management practices gain manifested in many municipalities defaulting on payments to creditors and falling into financial and service delivery crisis.
“Furthermore, personnel expenditure is crowding out spending on service delivery and investment. In response, Treasury has placed 25 municipalities under imperative intervention, under S139(5) of the Constitution, while three municipalities are subject to imperative intervention under S139(7),” he said.
The Minister emphasised that professionalising the administration of the municipalities is a critical pillar of addressing these issues, particularly the training of chief financial officers and municipal managers.
He told Members of Parliament that Treasury is supporting the countrywide roll out of training to support the implementation of the Municipal Standard Chart of Accounts, in addition to a number of free tools and training opportunities.
“Over the last 12 months, 31 special council induction sessions were conducted for the 43 municipalities identified as being in financial and service delivery crisis. We are not resting on our laurels. Our interventions are beginning to bear fruit,” Godongwana said. – SAnews.gov.za
Plum Moon
Fun South African Fact: Travel to Tsitsikamma, on the border of the Western Cape and Eastern Cape to visit the world’s highest commercial bungee jump! Those who are brave enough can take the 216-meter jump off the Bloukrans Bridge and soar through the air towards the Bloukrans River below. Definitely a must for thrill-seekers and adrenaline-junkies!
judge
Sarmie – sandwich [saam-ie] A slang word for sandwich.