Budget should match Tau’s pledge to review BEE

Trade minister Parks Tau has repeatedly pledged to review BEE, a process that could, and should, begin with the Budget of 2026.

The current procurement system caps BEE premiums at 25% for contracts under R50 million, and at 11.1% for larger contracts. However, the cost of these premiums to the fisc has not been reported once since their implementation twenty-five years ago.

The budget process includes the tabling of the fiscal framework and revenue proposals, the Appropriations Bill, and the Division of Revenue Bill. IRR Legal will formally relate to Treasury, once again, how these can be used efficiently to report BEE premiums.

The lack of transparency regarding BEE premiums was flagged in the Zondo Report as “unhelpful”, and part of the fundamental systemic cause of state capture.

Furthermore, Treasury’s duty to spend transparently, and to maintain expenditure control, is imposed by the Constitution. Therefore, reporting BEE premiums to the public is not a “nice to have”, but rather a “must”, in constitutional terms.

It is understandable that proponents of BEE premiums have preferred to keep the cost hidden for decades. Polling commissioned by the IRR has repeatedly shown that a vast majority of South Africans would prefer BEE premiums to be cut down to zero, which was also advice given by the Zondo Report.

Promises to review BEE made by Minister Tau are welcome. Asking Sectoral Commissions to review their inputs and outputs is important. However, to get to the big picture, Tau, and all those interested in reviewing BEE, must go to the Budget, and the budget-keepers at Treasury, to discover what has really been going on.

Media contact: Gabriel Crouse, IRR Legal Executive Director Tel: 082 510 0360 Email: gabriel@irrlegal.org.za 

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za