• Change of culture needed

    The right leadership will help SA shed its culture of violence, says Mandi Smallhorne.

  • 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

Loading...
See More

nl

Shuttleworth targets exchange laws

Jun 10 2013 22:56


Related Articles

How much forex can I bring into SA?

Sars: Foreigners should declare money

Dynamic hedging solutions

 

Pretoria - Billionaire entrepreneur Mark Shuttleworth has taken the South African government to court to have the country's exchange control system declared unconstitutional.

Shuttleworth also wants the North Gauteng High Court in Pretoria to set aside a levy of over R250m he had to pay to get some of his assets out of the country in 2009, and order the SA Reserve Bank to return the money.

He further seeks an order declaring the bank's so-called "closed door policy", of insisting that the public communicate with it through the intermediation of authorised banks, unconstitutional and invalid.

Shuttleworth blames the existing system of exchange control in South Africa for forcing him to emigrate from South Africa in 2001. He says in court papers the system made it impossible to conduct his entrepreneurial and philanthropic ventures.

He had assets worth over R4.27bn in South Africa when he emigrated, but transferred the assets out of the country in 2008 and 2009, each time paying a 10% levy.

Shuttleworth currently lives on the Isle of Man and holds dual South African and United Kingdom citizenship.

His advocate, Gilbert Marcus SC, on Monday argued that the system of exchange control in South Africa was governed not by laws, but by the dictates of an organ of state which were not accessible to the public. They did not follow any constitutionally required process of promulgation and violated numerous constitutional rights.

He argued that the imposition of the levy was based on a policy decision by the finance minister and was unconstitutional because it operated as a revenue-raising mechanism without following the Constitution.

"One of the founding principles of a parliamentary democracy is that there should be no taxation without representation and that the executive branch of government should not itself be entitled to raise revenue for its operation, but should rather be dependent on the taxing power of Parliament which is democratically accountable to the tax-paying public," Marcus said.

"[The SARB] claims because the levy is only imposed on a small part of the population it does not qualify as tax," he said.

Marcus argued that the levy deprived Shuttleworth of his property without giving him the right to be heard, adding that section nine of the Currency and Exchanges Act was unconstitutional in that it gave the president unfettered legislative powers. This included the power to make retrospective laws and to amend an act of Parliament by promulgating regulations, irrespective of whether the legislation dealt with currency, banking, or exchange issues.

He argued the regulations violated the right to procedurally fair administrative action and the rights to property and free trade.

"[The regulations] set up a system of exchange control in which the crucial rules are made not by publicly accessible promulgated laws, but rather by an inaccessible system of 'in-house' rules.

"...The effect of the regulations is that the president has vested in the minister the sole power to determine the lawfulness or otherwise of every single transaction involving foreign exchange without any guidance."

The application continues before Judge Francis Legodi.

sarb  |  mark shuttleworth

NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
72 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:

SMALL BUSINESS

Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.
 
 

Top 10 richest musicians of all time

Check out the gallery to find out who they are!

 
 

Luxury living

10 of the most expensive things that will leave your jaw hanging!
Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote

Loading...