Exchange control regime offends law, court told

The Currency and Exchanges Act has ‘constitutionally offensive features’ as it gives the President ‘too much power’, the Constitutional Court was told yesterday when it heard the Mark Shuttleworth R250.5m exit levy matter, notes Legalbrief. The court reserved judgment in the SA Reserve Bank's (SARB’s) application for leave to appeal a SCA judgment in favour of the billionaire entrepreneur. The court also heard an application to cross-appeal the SCA judgment by Shuttleworth. This related to the lawfulness of certain aspects of the exchange control system, notes a report on the IoL site. Gilbert Marcus SC, for Shuttleworth, told the court while their chief concern was the matter of the R250.5m repayment owed to Shuttleworth, they also approached the court in the public interest regarding the Currency and Exchanges Act. ‘He comes to court and says this is a regime that has constitutionally offensive features,’ Marcus said. The Reserve Bank argued that the ‘dominant purpose’ of charging people when they move their money out of SA was to discourage them from doing so; it was not a tax, notes a Business Day report. The 10% ‘exit charge’ is no longer in place. But at stake for the fiscus is the risk of multiple claims for about R2.9bn that was raised through exit charges from 2003 to 2010. The SCA found the exit levy amounted to a tax, which required a law passed by Parliament and which, in that case, was absent.

Full IoL report