News in South Africa 12th May:
1. Beitbridge border tender:
The department of public works and infrastructure told the standing committee on public accounts (Scopa) on Tuesday that plans were afoot to issue tenders as part of solutions to adequately fence and secure the country’s borders.
This follows the dismal failure of the 40km razor wire Beitbridge border fence that was erected as a division between South Africa and Zimbabwe at the height of the Covid-19 pandemic.
The fence cost taxpayers R37-million and was described by public works minister Patricia de Lille earlier this year as “not fit for purpose”.
De Lille told Scopa on Tuesday: “We had received 16 proposals about different solutions for the fence, including ways of how to make use of technology. The evaluation committee is busy looking at those 16 proposals that we have received. They have promised me by the end of June they will recommend three different options.”
She told the watchdog committee that the options would then be presented to the department of defence for specification approval and that a tender process would start thereafter.
2. Taxi tax evasion:
The SA Revenue Service (SARS) collected only R5 million in annual corporate income tax from taxi operators, Finance Minister Tito Mboweni confirmed this week.
In a written answer to a parliamentary question from the DA about the industry’s company tax contribution, Mboweni said that this amount includes tax collected from taxi employment income.
“This is because the industry does not correctly disclose income from taxi business on their CIT returns but [includes it] under a generic income source code. We were not able to determine income solely from taxi operations. Our analysis indicates that the majority of the taxi industry is declaring a nil return or are having a refund due to them.”
There are some 250 000 minibus taxis operating in South Africa, according SA Taxi, the largest finance provider to the industry. Some 69% of local households use minibus taxis.
The industry generates annual revenues of an estimated R5 billion.
While the R5 million they contribute in company tax is minuscule by comparison, they do contribute billions to tax in other ways. According to SA Taxi’s estimates, minibus tax owners pay an estimated R1 billion in VAT on vehicle sales every year, as well as R7 billion in fuel levies. Their annual contribution to the Road Accident Fund (RAF) – via the RAF levy on fuel – is estimated to be R4 billion.
3. SOEs need saving:
Unions are heading to court to try and force Parliament to take action on South Africa’s failing SOEs, saying that it has the power and authority to save state companies that are bleeding money.
Numsa said that SOEs like Denel and SA Express have been abandoned by lawmakers, putting thousands of people at risk of losing their jobs.
The union argues that Parliament needs to play a more active role in overseeing liquidation procedures, and wants the court to force it to do so – like hosting public participation processes to determine whether liquidations should go ahead or not. They want this to extend to all SOEs.
4. Corrupt judges investigated:
The judges who presided over the R150 million Arms Deal Inquiry, which found no evidence of corruption in the multibillion-rand deal, are now facing an investigation for “incapacity, gross incompetence or gross misconduct”.
Judicial Service Commission (JSC) secretary Sello Chiloane has confirmed that the JSC’s conduct committee will hold a formal investigation into the complaint lodged against Judges Willie Seriti and Judge Hendrick Musi by non-profit organisations Open Secrets and Shadow World Investigations on 12 June.
In a 7 May letter to Open Secrets and Shadow World Investigations, acting Judicial Conduct Committee chairperson and Deputy Chief Justice Raymond Zondo affirmed the seriousness of the organisations’ complaint that the judges failed to properly investigate the arms deal.
He states in the letter that, should the complaint be established, “it is likely to lead to a finding by the Judicial Service Commission that Judge Seriti and Judge Musi are guilty of gross misconduct as envisaged in Section 14(4) of the JSC Act.”
If the judges are found guilty of such gross misconduct, they could face impeachment.
In their August 2020 complaint against the judges, Open Secrets and Shadow World Investigations also ask the conduct committee “to consider whether certain actions by Judges Seriti and Musi may constitute criminal misconduct and, if so, to refer these matters to the [National Prosecuting Authority] for further action”.
In a media statement released earlier on Tuesday, Open Secrets and Shadow World Investigations confirmed that they would make representations to the Judicial Conduct Committee on the complaint against Seriti and Musi.
5. Financial misconduct shrugged off:
Johannesburg Property Company (JPC) CEO Helen Botes and CFO Imraan Bhamjee are due to return to their posts soon despite a Special Investigating Unit (SIU) report revealing evidence that the pair may be guilty of financial misconduct regarding deep cleaning and sanitising contracts awarded during the coronavirus pandemic.
Botes and Bhamjee were suspended in September 2020 after investigations into the JPC contracts were tabled in the Johannesburg City Council.
In March 2021, the SIU informed acting Johannesburg City manager Floyd Brink and acting JPC CEO Asanda Majova it had completed its investigation into the contracts and found evidence that Botes, Bhamjee and three other officials may be guilty of financial misconduct.
Instead of disciplining Botes and Bhamjee, the JPC wants to lift their suspensions, disregarding the SIU’s findings and raising questions about the anti-corruption body’s powers.
The SIU detailed how the CEO and CFO allowed staff to negotiate contracts that violated both standard and emergency procurement procedures and failed to ensure JPC resources were efficiently and transparently managed.
SIU spokesperson Kaizer Kganyago said, “We are worried about these rumours that the suspensions will be lifted. The SIU is in discussion with JPC leaders about the reported lifting of the suspensions and the disciplinary charges it recommended against the five officials.”
The JPC manages the City of Johannesburg’s property portfolio of 64,000 properties, valued at R8.6-billion and covering 39,000ha across seven municipalities, according to the JPC’s website. The JPC had a budget of R968.6-million, according to the city’s 2020/21 budget. Botes has run the JPC since 2009.