DA: Statement by Dion George, Democratic Alliance shadow minister of finance, supporting the proposal for politicians to submit a tax clearance certificate (14/03/2010)

14th March 2010

The Democratic Alliance (DA) supports the call by Prof Kader Asmal for all public representatives to obtain and submit a tax clearance certificate (TCC) on an annual basis, confirming that they have met their tax obligations. There is already a requirement that any company that is awarded a government tender should supply a tax clearance certificate before any tender is awarded. This requirement must be vigorously applied to politicians too.

Tax clearances will not, however, alone ensure that politicians are not involved in corrupt and unlawful activities. Far bolder action is required and is not impossible to achieve. The Financial Intelligence Centre Act (FICA) was enacted to ensure that the source of funds received from individuals into the financial sector can be verified. The Financial Intelligence Centre (FIC), which was set up in terms of FICA, monitors millions of financial transactions through the financial sector, who must report suspicious activity.

With the FIC already in place, it would be a small step to introduce a register of politically exposed persons whose financial transaction could be monitored for irregularity.

The DA will submit this proposal to the Minister of Finance.

South Africa is a member of the Financial Action Task Force (FATF), an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. FATF recommendation 6 suggests additional due diligence measures for "politically exposed persons", a phenomenon which South Africa has in abundance. We believe extending FIC oversight to politicians can help to achieve that.

Following President Zuma's recent visit to the United Kingdom, it has become embarrassingly obvious that South Africa is considered by many potential investors to be riddled with corruption, perpetrated by politicians and those who are politically connected. These are steps that will help to ensure that ill-gotten gains can be identified and exposed.