Parliament approves Division of Revenue Amendment Bill
The bill provides for the reprioritisation of funds allocated to national, provincial and local government in response to the COVID-19 pandemic.
CAPE TOWN - The National Assembly has approved the Division of Revenue Amendment Bill.
The Bill was passed by 214 votes in favour and 119 against, with no abstentions.
The bill provides for the reprioritisation of funds allocated to national, provincial and local government in response to the COVID-19 pandemic and was tabled by Finance Minister Tito Mboweni when he unveiled his emergency budget last month (June 24).
Finance Minister Tito Mboweni said the government had little choice but to shift resources in order to fund efforts to combat the COVID-19 crisis.
Replying to debate on the Bill, he told MPs the country was in a difficult situation.
“Faced with a contracting economy, where we are going to lose plus-minus R300 billion in tax revenues, it is therefore unavoidable that the consolidated budget deficit will be higher at 15.7% and the budget deficit itself will be at somewhere around 14% as well.”
Mboweni said these budget deficits were much bigger than the government would have wanted them to be. That’s why the government has approached the BRICS bank (the New Development Bank), the International Monetary Fund, the African Development Bank and the World Bank for more money.
“But we’ve also created market mechanisms through the National Credit Guarantee Scheme to ensure that money continues to flow in the economy to increase liquidity for firms to access this funding to allow the wheels of the economy to start turning now that we’re at enhanced level three.”
The Division of Revenue Amendment Bill is set to come before the National Council of Provinces for its approval next Wednesday.