Cape Town - Finance Minister Enoch Godongwana said on Wednesday that the government should take bold steps to improve state capability and reduce the scope for procurement corruption.
Delivering his Budget speech in the National Assembly, Godongwana said corruption was a major blight on the country.
“It has lowered our economic growth potential, made us fiscally more vulnerable and severely weakened the capability of the state.
“Accounting officers need to ensure that their procurement processes have integrity, provide value for money, and are free from interference from politically connected persons and bidders,” he said.
The minister also said there was a need to differentiate between corruption and minor transgressions of the rules of policy prescripts that were audited as irregular expenditure.
READ THE FULL BUDGET SPEECH
“The National Treasury is engaging with the Auditor-General to continue to ensure transparent disclosure of minor transgressions, but outside the financial audit process.”
Godongwana stated that the Public Procurement Bill would be tabled before Parliament in 2022/23.
“In light of the recent Constitutional Court judgment on the preferential procurement regulations, and the first Zondo Commission report highlighting abuses in state procurement, we are revising the bill to take account of these developments.
“We will also be responding formally to the Zondo Commission report.”
He said working with the SA Revenue Service (Sars), the Investigating Directorate has brought charges against a company director and a Gupta associate involved in the corrupt Estina Dairy project.
“This is on charges of fraudulent VAT refund claims, under-declaration of plant and equipment expenses, and exchange control violations. Sars is also recovering the fraudulent refunds that were claimed.”
Godongwana said they were also dealing with illicit trade.
“Just yesterday, Sars conducted a search and seizure operation. This operation uncovered another consignment of illegal tobacco products, bringing the total value of illicit tobacco seized during the pandemic to over R350 million,” he said.
“Overall, Sars has raised assessments of R18 billion additional duties, cancelled the trading licenses of three operators, liquidated one operator, and referred eight cases for criminal prosecution,” the minister added.
Godongwana also said that they were addressing the weaknesses in fighting fraud and money laundering identified in their recent mutual evaluation of anti-money laundering system by the Financial Action Task Force.
Political Bureau