Parliament passes 2021 Division of Revenue Bill

The National Council of Provinces at its plenary sitting this morning, passed the Division of Revenue Bill 2021.

Section 214(1) of the Constitution of the Republic of South Africa requires that every year a Division of Revenue Act should determine the equitable division of nationally raised revenue between national, provincial and local government. The Minister of Finance, Mr Tito Mboweni, tabled the 2021 annual national Budget, including the Division of Revenue Bill in the National Assembly on 24 February 2021.

The Bill provides for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2021/2022 financial year. It also provides for 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. The Bill also covers the conditions on which those allocations are made.

The central fiscal objectives over the 2021 Medium Term Expenditure Framework (MTEF) period are to, among others, narrow the budget deficit and stabilise the debt-to-GDP ratio, primarily by controlling non-interest expenditure growth; provide continued support to the economy and public health services in the short term, without adding to long term spending pressures; and improve the composition of spending, by reducing growth in compensation while protecting capital investments.

The Select Committee on Appropriations' report to the National Council of Provinces, states that the committee agreed to the Bill without amendments. However, the committee made a number of recommendations on the Bill - to the Minister of Finance, National Treasury and to the Minister of Cooperative Governance and Traditional Affairs. These executive authorities are required to send Parliament their responses to the recommendations within 60 days.

To read the committee's full report on the Division of Revenue Bill, starting on page 83, please click: https://www.parliament.gov.za/storage/app/media/Docs/atc/95e41f07-0d27-4ff9-90b5-cf8e48095d4a.pdf

The Bill was passed by the National Assembly on 18 March 2021 and will now be referred to the President for consent.

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