Section 220-230 Constitution of South Africa 1996
Section 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, and 230 of the Constitution of South Africa 1996 (as amended) are under ‘General Financial Matters‘, ‘Central Bank‘ and ‘Provincial and Local Financial Matters‘ of Chapter 13 of the Constitution. Chapter 13 is titled ‘Finance‘.
(Section 220-222) Financial and Fiscal Commission
Section 220 Constitution of South Africa 1996
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 Constitution of South Africa 1996
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 deputy chairperson;
b. three persons selected, after consulting the Premiers, from a list compiled in accordance with a process prescribed by national legislation;
c. two persons selected, after consulting organised local government, from a list compiled in accordance with a process prescribed national legislation; and
d. two other persons.
[Sub-s. (1) amended by s. 2 of Act No. 2 of 1999 and substituted by s. 7 (a) of Act No. 61 of 2001.]
1A. National legislation referred to in subsection (1) must provide for the participation of –
a. the Premiers in the compilation of a list envisaged in subsection (1) (b); and
b. organised local government in the compilation of a list envisaged in subsection (1) (c).
[Sub-s. (1A) inserted by s. 7 (b) of Act No. 61 of 2001.]
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 Constitution of South Africa 1996
Reports
The Commission must report regularly both to Parliament and to the provincial legislatures.
(Section 223-225) Central Bank
Section 223 Constitution of South Africa 1996
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 Constitution of South Africa 1996
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 Constitution of South Africa 1996
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.
(Section 226-230) Provincial and Local Financial Matters
Section 226 Constitution of South Africa 1996
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.
4. National legislation may determine a framework within which-
a. a provincial Act may in terms of subsection (2) (b) authorise the withdrawal of money as a direct charge against a Provincial Revenue Fund; and
b. revenue allocated through a province to local government in that province in terms of subsection (3) must be paid to municipalities in the province.
[Sub-s. (4) added by s. 8 of Act No. 61 of 2001.] (Date of commencement: 1 January 1998.)
Section 227 Constitution of South Africa 1996
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.
(Date of commencement: 1 January, 1998.)
Section 228 Constitution of South Africa 1996
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 any tax, levy or duty that is imposed by national legislation, other than on corporate income tax, value-added tax, rates on property or custom duties.
[Para. (b) substituted by s. 9 of Act No. 61 of 2001.]
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.
(Date of commencement: 1 January, 1998.)
Section 229 Constitution of South Africa 1996
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.
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.
(Date of commencement: 1 January, 1998.)
Section 230 Constitution of South Africa 1996
Provincial loans
1. A province may raise loans for capital or current expenditure in accordance with national legislation, but loans for current expenditure may be raised only when necessary for bridging purposes during a fiscal year.
2. National legislation referred to in subsection (1) may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.
[S. 230 substituted by s. 10 of Act No. 61 of 2001.]
Section 230A Constitution of South Africa 1996
Municipal loans
1. A Municipal Council may, in accordance with national legislation-
a. raise loans for capital or current expenditure for the municipality, but loans for current expenditure may be raised only when necessary for bridging purposes during a fiscal year; and
b. bind itself and a future Council in the exercise of its legislative and executive authority to secure loans or investments for the municipality.
2. National legislation referred to in subsection (1) may be enacted only after any recommendations of the Financial and Fiscal Commission have been considered.
[S. 230A inserted by s. 17 of Act No. 34 of 2001.]
