Division of Revenue Act

Link to law: http://www.gov.za/documents/division-revenue-act-2
Published: 2000-06-09

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Division of Revenue Act [No. 16 of 2000]
REPUBLIC OF SOUTH AFRICA
GOVERNMENT GAZETTE
Registered at the Post Ojice as a Newspaper
j r-., ,- - - - - - ,., - - - 6 // i# .—
VOL. 420 CAPE TOWN, 9 JUNE 2000 No. 21270
THE PRESIDENCY
No. 595. 9 June 2000
It is hereby notified that the Acting President has assented to the following Act which is hereby published for general infor- mation:—
No. 16 of 2000: Division of Revenue Act, 2000
~ No. 21’270 GOVERNMENT GAZETTE, 9 JUNE 2000 .—.—
Act iN’o. 16, 2000 DIVISION OF REVENUE ACT, 2000
(English text signed by the Acting President.) (Assented to 7 June 2000.)
ACT To provide for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2000/2001 financial year; and to provide for matters connected therewith.
PREAMBLE
WHEREAS section 214 (1) of the Constitution requires an Act of Parliament to provide for—
(a)
(1?)
(c)
the equitable division of revenue raised nationally among the national, provincial and local spheres of government; the determination of each province’s equitable share of the provincial share of that revenue; and 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.
B E IT THEREFORE ENACTED by the Parliament of the Republic of South Africa,as follows:— Definitions
1. In this Act, unless the context indicates otherwise— (i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii) (viii)
(ix)
(x)
(xi)
“constitution” means the Constitution of the Republic of South Africa, 1996 5
(Act No. 108 of 1996); “department” means a national department referred to in section 7(2) of the Public Service Act, 1994 (Proclamation No. 103 of 1994); “Director-General” means the Director-General of the Department of Finance; 10 “executing authority” means the executing authority defined in section 1 of the Public Service Act, 1994; “financial year” means the financial year of the national and provincial spheres of government commencing on 1 April 2000 and ending on 31 March 2001 ; 15 “head official of the provincial treasury” means the officer in charge of the. provincial department responsible for financial matters in a province; “Minister” means the Minister of Finance; “MINMEC” means the meeting between a Minister of the Cabinet in the national sphere of government responsible for particular functions and the 20 provincial Members of the Executive Council having responsibility for corresponding functions in the provincial sphere of government; “municipality” means a local government body envisaged in section 155 of the Constitution; “municipal accounting officer” means the Chief Executive Officer of a 25 municipality; “municipal financial year” means the financial year of the local sphere of government commencing on 1 July 2000 and ending on 30 June 2001;
GOVERNMENT GAZETTE, 9 JUNE 2000 No. 21270 :1
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
(xviii) (xix)
(xx)
(xxi)
(xxii)
(xxiii)
(xxiv)
(xxv)
DIVISION OF REVENUE ACT, 2000 Act No. 16, 2000
“national accounting officer” means the head of a department or a statutory fund in the national sphere of government or such other person who has, by law, been approved or instructed by the relevant treasury to be the accounting officer of a department or a fund in the national sphere of government, and who is charged with any of the responsibilities of accounting officers set out in Part 2 of Chapter 5 of the Public Finance Management Act; “next financial year” means the financial year of the national and provincial spheres of governmerit commencing on 1 April 2001 and ending on 31 March 2002; “next mutiicipal financiai year” means the financial year of the local sphere of government commencing on 1 July 2001 and ending on 30 June 2002; “past financial year” means the financial year of the national and provincial spheres of government commencing on 1 April 1999 and ending on 31 March 2000; “past municipal financial year” medins the financial year of the local sphere of government commencing on 1 July 1999 ar.d ending on 30 June 2000; “payment schedule” means an installment schedule which sets out— (a) the amount of each installment of an equitable share or an allocation to be
transferred to a province, municipality or SALGA for the financial year; (b) the date on which each such installment must be paid; and (c) to whom each such installment must be paid; “prescribed” means prescribed by regulation under this Act; “provincial accounting oflicer” means the head of a department or a statutory fund in the provincial sphere of government or such other person who has, by law, been approved or instructed by the relevant treasury to be the accounting officer of a department or a fund in the provincial sphere of government, and who is charged with any of the responsibilities of accounting officers set out in Part 2 of Chapter 5 of the Public Finance Management Act; “Public Finance Management Act” means the Public Finance Management Act, 1999 (Act No. 1 of 1999); “receiving officer” means— (a) in respect of a Schedule 3A grantor a Schedule 3B grant not transferred
to a municipality, but to be utilised for the benefit of a municipality by a province in terms of a provincial appropriation Act, or a Schedule 3C grant, the accounting officer of a provincial department which receives a grant set out in any such Schedule; or
(b) in respect of a Schedule 3B grant transfemed to a municipality directly or through a province, or a Schedule 3C grant, the accounting officer of a municipality which receives a grant contained in any such Schedule;
“R293 town” means a township within the meaning of Proclamation No. R293 of 1962 or any other similar town approved by the Minister responsible for local government; “SALGA’ means the organisation recognised in terms of section 2(1 )(a) of the Organised Local Government Act, 1997 (Act No. 52 of 1997); “transferring national officer” means the accounting ofhcer responsible for a national department which transfers to a province or municipality a Schedule 3A, 3B or 3C grant; “transferring provincial oficer” means the accounting officer responsible for a provincial department which receives a Schedule 3B or 3C grant for the purpose of transferring it to municipalities in that province.
PART I
EQUITABLE SHARE ALLOCATION
Equitable division of revenue raised nationally among spheres of government
2. Anticipated revenue raised nationally in respect of the financial year is divideci among the national, provincial and Iocol spheres of government for their equitable share as set out in Schedule 1.
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Act No. 16, 2000 l)[\ 1.71C)N (>F RE\’ENl.iE ACT, 2000
Shortfalls and excess revenue
3. ( 1 ) If actual revenue raised n~[ionally in rcspecl of the financial year falls short of the anticipated revenue set out in Sc!mlulc 1, [he national government bears dm shortfall,
(2) If actual revenue raised nationally in respect of the financial year is in excess of the 5 anticipated revenue set out in Schedule 1, the excess accrues to the national government.
Equitable division of provincial share among provinces
4. (1) Each province’s equitable share of the provincial share of anticipated revenue raised nationally in respect of the financial year is set out in Schedule 2.
(2) Each province’s equitable share of the provincial share of anticipated revenue 10 raised nationally in respect of the financial year must be transferred to the province in weekly installments in accordance with a payment schedule determined by the Director-General after consultation with the head officials of the provincial treasuries.
(3) Despite subsection (2), the Director-General may, on conditions determined by the Minister, advance funds to a province in respect of its equitable share set out in Schedule 15 2, which have not yet fallen due for transfer in accordance with the payment schedule referred to in subsection (2) in respect of that province.
(4) The advances contemplated in subsection (3) must be set-off against transfers to the province which would otherwise become due in terms of that payment schedule.
Equitable share for local government 20
5. (1) The local sphere of government’s equitable share of anticipated revenue raised nationally is set out in Schedule 1.
(2) The national accounting officer responsible for local government must determine the allocation for SALGA and for municipalities in respect of this equitable share.
(3) The criteria for determining the share contemplated in subsection (2) must be in 25 accordance with a framework approved by the Director-General, after taking into account any recommendations of SALGA.
(4) The allocation to each body referred to in subsection (2) must be transferred LO the body concerned in monthly or quarterly installments in accordance with a payment schedule determined by the national accounting officer responsible for local govern- 30 ment.
PART II
OTHER ALLOCATIONS
Other allocations to provinces and municipalities
6. (1) Other allocations to provinces and municipalities from the national govern- 35 ment’s share of anticipated rev~nue raised nationally ~n respect of the financial y&r, and any additional conditions on which those allocations are made, are set out in Schedules 3A, 3B and 3C.
(2) Subject to section 226 of the Constitution, and any conditions attached to a grant, a province or municipality may, unless otherwise directed by the Director-General, 40 retain any funds not expended in respect of an allocation set out in Schedules 3A or 3B.
(3) In (a)
(b)
(c}
this Act— Schedule 3A contains conditional grants and any other grants transferred by a department to a province to fund programmed falling with!in th? functional areas of provincial competence; 45 Schedule 3B contains conditional grants and any other grants transferred by a department to a municipality directly or through a province or which a province utilises in terms of an appropriation Act, to fund programmed falling within the functional areas of municipal competence; Schedule 3C contains agency payments to be effected on behalf of a 50 department, grants still to be divided between spheres and which the Minister may, by notice in the Gazette, allocate as either Schedule 3A or 3B grants or as agency payments or any other grant.
GOVERNMENT GAZETTE, 9 JUNE 2000 N0,21270 5
DIVISION OF REVENUE ACT, 2000 Act No. 16,2000
Conditional grants
7. (1) The transfeming national officer responsible for a conditional grant set out in Schedule 3A or Schedule 3B must by 1 April 2000 or such date agreed upon with the Director-General, but not later than 30 June 2000, submit to the Director-General at least the following information: 5
(a) (b) (c)
(d) (e)
%
The purpose and conditions, if ally, of the grant; the proposed criteria for the division of such grant among the provinces; any associated costs, including any future costs, arising directly or indirectly from the grant but not covered by it; the monitoring and reporting mechanisms for such grant; 10 the proposed payment schedule for such grant; agreements, if any, of the MINMEC relating to such grant; and such other information that may be requested by the Director-General.
(2) A transferring national ofllcer must by 1 Ap~il 2000& such later date agreed upon with the Director-General, but not later than 30 June 2000, certify to the Director- 15 General that all arrangements, business plans, payment schedules and any other requirements deemed necessary to allow funds to be transferred to a province or municipality, are in place.
(3) Before submitting the information required in subsections (1) and (2), the transfeming national officer must consult with the receiving oflicer in respect of a grant 20 to a province, or with SALGA in respect of a Schedule 3B grant to be received by a municipality.
(4) The Director-General may exempt a grant from any of the requirements of subsections (l), (2) or (3).
(5) (a) The transferring national officer must deposit, in accordance with a payment 25 schedule determined by the Director-General after consultation with the head officials of provincial treasuries in respect of a deposit to a provincial Revenue Fund, a Schedule 3A or 3B grant into—
(i) the relevant provincial Revenue Fund; or (ii) the relevant municipal banking account, where a Schedule 3B grant is 30
transferred directly to a municipality. (b) The transferring provincial officer must deposit, in accordance with a payment
schedule determined by the transferring national officer after consultation with the Director-General, a Schedule 3B grant into the relevant municipal banking account.
(6) Funds transferred to a provincial Revenue Fund must, subject to section 226 of the 35 Constitution, only be withdrawn—
(a) in terms of an appropriation by a provincial Act ; or (b) in the case of a Schedule 3B grant transferred to a municipality through a
province, as a direct charge against that Revenue Fund. (7) The receiving officer of a Schedule 3A or Schedule 3B grant must ensure— 40
(a) that it is properly managed and accounted for; (b) that the funds are spent in accordance with its purpose and conditions; and (c) that there is compliance with agreed reporting and monitoring mechanisms.
(8) (a) The receiving officer in a municipality of a Schedule 3B or 3C grant must submit to a transferring provincial or national officer, as the case may be, a report on the 45 grant in the prescribed form not later than five working days after the end of every month or such date prescribed in respect of such grant.
(b) The receiving officer in a province in respect of a Schedule 3A or 3C grant or the transferring provincial officer, as the case may be, must, by the tenth working day after each month or such date prescribed in respect of such grant, submit a report to the head 50 official of the provincial treasury and to the transferring national officer.
(9) The reports contemplated in subsection (8) must include— ((l)
(b)
(c) (d)
an outline of actual revenue and expenditure on the grant for a month and the projected total revenue and expenditure on the grant for the financial year, including projected commitments on it for the financial year; 55 the reasons for any projected under-spending or over-spending on that grant and an identification of the measures to be taken to deal with such under-spending or over-spending; the projected roll-over into the next financial year; information on how the province or municipality receiving a grant complied 60 with its conditions; and
(1 NO 2127(1 GO\’ERNMENT GAZETTE. 9 JUNE 200C
Act NO. ]6, ~()()11 i)I1’lSION OF RE~!ENLE ACT, 2000
(e) sucllothcr infonllation asln:l!/ bcreques~ed bythe Director-General. (l O) The transferring na[ional ofliccr andti~e hcadofiicial ofaprovinciai treasury
must ensure that the report contemplated in subsection (9) is submitted in the prescribed form to the Director-General by the ~iftccnth working day after the end of each quarter or such date agreed upon with the Dircc!.m-General,
Agency payments
8. (1) The national accounting officer of a department or the provincial accounting officer of a provincial department responsible for transferring an agency payment is responsible for accounting for that agency payment and must, for the purpose of such accounting, by 1 April 2000 or such date agreed upon wi~h the Director-General but not later than 30 June 2000, enter into agreements with the relevant provincial or municipal accounting officers regarding any responsibilities and obligations of the principal and agent dcpar(ments concerning that agency payment, and must, if he or she is a national accounting officer, submit a schedule outlining such agreements to the Director-General, or must, if he or she is a provincial accounting officer, submi~ such a schedule to the head official of the provincial treasury concerned.
(2) Subject to subsection (1), an agency payment to a province must be deposited in a banking account approved by, and subject to the conditions determined by, the head official of a provincial treasury and must comply with the framework determined in terms of section 7 of the Public Finance Management Act.
(3) A province or municipality performing an agency service may charge a two percent fee or such other amount agreed upon to cover the costs of rendering such service.
Allocations in respect of capital grants
9. (1) In respect of grants identified as capital grants in Schedules 3A, 3B and 3C, every transferring national officer must, on a quarterly basis, provide the Director- General with a schedule outlining the transfer agreements for such grants in respect of each province or municipality receiving such grant during that quarter.
(2) The agreements referred to in subsection (1) must include— (a) the conditions of the grant; (b) the monitoring and reporting mechanisms for the grant; (c) the projected dates of transfers of the grant; and (d) the projected financial implications in future years,
resulting from the project funded by the grant. (3) The transfer of funds in respect of allocations for capital grants must be in
accordance with a payment schedule determined by the national accounting officer responsible for that allocation after consultation with the Director-General, relevant provincial accounting officers and the head officials of the provincial treasuries concerned.
(4) Funds transferred to the provincial Revenue Fund or a municipal banking account for capital projects may not be used as collateral, pledge or any other form of security or for any other purpose other than the purpose set out in the transfer agreement.
Supplementary allocation to provinces
10. (1) Subject to subsection (2), the allocations to provinces set out in Schedule 3A in respect of the item “Supplementary Allocations to Provinces” must be transferred to the provinces in three installments in accordance with a payment schedule determined by the Director-General after consultation with the head officials of the provincial treasuries.
(2) The first installment must kw paid not later than 18 .luly 2000, after taking into account—
(a) whether a province submitted its final appropriation accounts for the past ~nancial year to the National Treasury by 30 June 2000; and
(b) compliance with the adjustments grant agreements entered into between the provincial government and the national government in December 1999.
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GOVERNMENT GAZETTE, 9 JUNE 2000 No. 21270 7
DIVISION OF REVENUE ACT, 2000 Act No. 16,2000
Withholding of payments
11. (1) The Director-General may, with the concurrence of the Minister, direct that any payment to a municipality in terms of section 5 or set out in Schedule 3B or 3C, or a portion of such payment, be withheld if a municipality is involved in serious or persistent material breach of the measures envisaged in section 216(1) of the Constitution.
(2) The Director-General may, with the concurrence of the Minister, and subject to section 216 of the Constitution, direct that—
(a) an allocation or any portion of it referred to in Schedule 3A or 3B, but which is not transferred to a municipality, or referred to in Schedule 3C; or
(b) an allocation approved in terms of section 16(l), be withheld if the transferring national officer submitted to the province concerned, a written report at least 21 days before such payment is due, setting out facts evidencing serious or persistent material breach of the measures envisaged in section 216( 1-) of the Constitution: Provided that subject to subsection (1), a supplementary allocation to provinces may be withheld even if no report has been given to a province.
(3) In the event of evidence of substantial non-compliance, with the conditions of a grant, or mismanagement of the grant or any other form of financial misconduct, the national accounting officer responsible for the grant must, as soon as such evidence comes to his or her attention, report such non-compliance, mismanagement or other form of financial misconduct to the Director-General.
(4) The Minister may, by notice in the Gazette, approve that funds or a portion of funds withheld in terms of subsection (1) be used to address a municipality’s outstanding statutory commitments.
PART III
GENERAL
Conversion of conditional grants, agency payments and capital grants into equitable shares
12. The Minister may, by notice in the Gazette, determine that funds which, due to non-compliance by the transferring national officer with the provisions of sections 7, 8 and 9, cannot flow to provinces or municipalities, form part of the equitable share of revenue to be allocated to provinces or municipalities.
Reporting in respect of provincial transfer of grants not set out in schedule to this Act
13. A provincial accounting otlicer transferring any funds not set out in a schedule to this Act to a municipality must, prior to such transfer, report to the relevant head official of a provincial treasury, who must on a quarterly basis submit to the Director-General such report, which must set out—
(a) the purpose of the allocation; (b) the amount of the allocation; (c) to whom the allocation is made; (d) conditions, if any, on which such allocation is made; and (e) information on his or her responsibilities in respect of monitoring and
reporting on such grant.
Amendment of payment schedule and transfer mechanism
14. (l) The Director-General may amend any payment schedule in the interests of improved debt and cash flow management, after consulting—
(a) the person or persons whom the Director-General was required to consult before determining that payment schedule; or
(b) the national accounting officer who is responsible for a payment schedule, as the case may be.
(2) The Director-General may, after consultation with the relevant head officials of provincial treasuries, amend the transfer mechanism of any funds listed in Schedules 3A, 3B and 3C or published in the Gazette in terms of this Act, and such amendment
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s No 21270 GOVERNMENT GAZETTE. 9 JUNE 2000
,ict N(). 16, 2(W) [) I\ ’ISICrN OF REVENUE ACT. 2000
may include moving funds bcltveen .’khcdulcs 3A, 3B or 3C or reallocating R293 town lVISlON (>F REVEhlUE ACT. 2000
(a) anything which must or may bc prescribed in terms of (his Act; and (h) any matter which is necessary [o prescribe for the ei~cctivc implementation of
the provisions and objects of this Act.
Short title
24. This Act is called the Division of Revenue Act, 2000. 5
GOVERNMENT GAZETTE, 9 JUNE 2000 No, 21270 11
DIVISION OF REVENUE ACT, 2000 Act No. 16,2000
SCHEDULE 1
Equitable division of revenue raised nationally among the three spheres of government
I Provincial I 94408341 I Local
I 1867000
I
1? No. 21270 GOVERNMENT GAZETTE, 9 JUNE 2000 .—— _ _ _
Act No. 16, 2000 DIJISION OF REVENUE ACT, 2000
SCHEDULE 2
Determination of each province’s equitable share of the provincial sphere’s share of revenue raised nationally
(as a direct charge against the National Revenue Fund)
Province Allocation (R 000) Eastern Cape 16451931 Free State 6407739
I Gautenr I 14234920 I
North West 8009019 Western Cape 9059151
GOVERNMENT GAZETTE, 9 JUNE 2000 No. 21270 13 —
DIVISION OF REVENUE ACT. 2000 Act No. 16, 2000
SCHEDULE 3A
Grants to provinces
%ovincial illncations
fame of
;rant
Purpose Total R’000
additional ConditionsVote R’000
!astem Cap-e %x State ;auteng :waZulu-Naml dpumalmga {orthern Cape Jorlhern Province ~orth V&[ Vestem Cme
r. suppOrt inancial mm- kgement and pality -en- Iancmg mitia- ives in school :ducatlon
202000 38854 12096 23616 45765 14016 3648
33477 15360 Is 168
3ducati0n Vote 8)
Inance .Vote 1 O)
?nancial Wmagement md Quality enhancement ‘or Education )epxtmenrs
$upplcmen- aty allocation 0 provinces
) Ti-x.prnvince’s Appro- priation Act for the fi- nancial yew must reflect adequate funding of pro- jected spending on health, education and welfare and must reflect adequate steps to be taken to improve the collection of own rev- enue.
.) The province must cOm- ply with generally recognised financial management practices, internal controls, trea- sury norms and stan- dards, borrowing rules and other legislation.
I) The province must cOm- ply with agreements of the Budget Council and comply with deadlines for the budgetwy pro- (XXS.
,) The province must sup- ply information required by [he Minister timeously and in the pm. scrtbed format, includinf the monthly early warn- ing reports and !nforrna- rion related to the 2CH31/02 budget, to fa- cilitate transparency and effective monitoring.
ro supplemen xovincitd .evenue in ;upport of mprovements n financial management md budget xactice
2212000 ktem Cape ‘ree State imteng (waZulu-Natal dpumalangzz (orthern Cape (orthern Province Jortb West Wsfem Cape
389622 148303 322358 45 I 032 152522 51809
305049 I S5 803 205502
Health :Vme 13)
I) Central %pltals
I) Profes- sional tmining md research
To support central health services
r~ suppOrt health profes- sional trmmng and research
3112000 %tem CaIX +ee State ;aurmg (waZulu-Natal Nestem Cape
1300( 23753:
149286: 406645 961945
1 1 7 4 0 0 0 %tern Cape %ee Stare >auteng f tie Durban icadermc +ospital capital grant)

ro fund the ehabilitat]on jf hospitals capital grant)
KwaZulu-Na[d 273 00Q
:) Rehablhta- Ion of HospI - als
) integrated {umilion ‘rogramme
400 OW
582411
&stem Cape Free State Szwteng KwaZulu-Na[al ‘vfpumakmga Northern Cape ‘Jorthern Province Nonh West Western Cape
Eastern Cape Free State Sauteng KwaZulu-Natal Vfpumalanga Vorthern Cape %-them Province Vorth West Western Cape
84 O(I3 31 Otxl 55 m 70 OCO 35000
7(KXI 52000 40000 26 f?OO
131838 39394 54673
132471 39728 10096
106032 39393 28789
;ousing Vote 15)
I) SA Housing ‘und
I) Human ;et [Iement (edevelop- nem ‘rograrnme
rO finance :apitd hous- ng wogrammes capital grant)
‘0 improve he quafity of trban environ. nent
2997680
20000
Easlern Ca~ Free State &mteng KwaZulu-Natal Mpumalanga Northern Cape ‘Jortbern Prownce North West Western Cape
‘me State &uteng