Question No. 6
Mr D B Feldman (COPE-Gauteng) to ask the Deputy President:
Whether the government will ensure that a lifestyle audit of all (a) Cabinet members, (b) Deputy Ministers, (c) Directors-General and (d) Directors is undertaken in order to assuage the disquiet of the citizens regarding the unexplained wealth of persons high up in government; if not, why not; if so, how is the government planning to drive this so that public confidence is restored?
Reply:
Honourable Member, as you are aware Ministers and Deputy Ministers are required in terms of the Code of Ethics for Members of Parliament and the Executives Ethics Act and Code to disclose details of their financial interests, assets and gifts received. Senior public servants from the level of director upwards are required to do the same in terms of the Public Service Regulations.
As I am sure that you aware, violations of the Parliamentary Code are handled by Parliament and have been dealt with effectively in the past. Complaints against violations of the Executive Ethics Code can also be dealt with by the Public Protector.
As I reported in the National Assembly last week, the South African Revenue Service (SARS) conducts investigations of people who appear to be living beyond their means. These investigations start on the basis of information obtained from various sources, including the South African Revenue Service (SARS) anti-corruption and fraud hotline, income tax returns a taxpayer submits to SARS and suspicious activity reports from members of the public.
A lifestyle questionnaire is one method of obtaining information from a taxpayer and together with other information sources assists SARS in matching the lifestyle trends, income streams and the asset base of a taxpayer to what has been declared in an income tax return. The accumulated wealth has to be explained by the taxpayer for tax purposes. Any unexplained wealth is taxed.
The compliance and risk unit within SARS conducts the risk analysis of taxpayer information. If there is a mismatch between what the taxpayer has declared and what SARS has found, the case is referred for an audit.
If it is confirmed that the taxpayer has evaded tax, penalties are levied, interest is charged and additional tax of up to 200 percent of the evaded tax is charged. Depending on the circumstances, the case may then be handed to SARS criminal investigation who then engages the South African Police Service (SAPS) and a specialised tax unit for criminal prosecution within the National Prosecuting Authority (NPA). More than 10 000 such audits have been conducted by SARS over the past two years.
The Prevention and Combating of Corrupt Activities Act of 2003 also provides for an investigation into a person who appears to own property disproportionate to their income. This is in addition to stringent Financial Intelligence Centre Act (FICA) requirements that compel individuals to disclose sources of income when they make large financial transactions.
In light of the above, Cabinet is not considering lifestyle audits for Ministers; Deputy Ministers and senior public servants as there are already appropriate measures in place.
Honourable Members of this august House, each and every one of us has a duty as public representatives to ensure that members of the public and our constituencies are aware of the regulatory framework designed to deter corruption. However, and more importantly, it is necessary that as public representatives we inform the public about all the means available to them as citizens to bring to the attention of the authorities any information that they might have that will bring to book anybody involved in corrupt activities of any kind. The more our people know about these measures and the more we exercise oversight as Parliament, the better we will be able to restore public confidence as mentioned by the Honourable Member.
Issued by: The Presidency
11 March 2010
