THE POLITICAL PARTY FUNDING ACT (PPFA) (Act nr 6 of 2018)

 

Heralding even greater transparency in South Africa’s democracy, the Political Party Funding Act came into effect on 01 April this year.

In essence: “The Political Party Funding Act introduces a strict regulatory framework for the private funding of political parties. This includes setting limits for the source, size and use of donated funds by political parties”.

The Independent Electoral Commission (IEC) has a significant role to play as the effective implementer of the Act. According to the IEC , “The funding of political parties is a key aspect of all modern multi-party democracies and the drafting and approval of the Act by Parliament was a major step towards regulating this space and bringing South Africa into line with best international practice”.

The website of the IEC, www.elections.org.za advises as follows:

Obligations of political parties

  • Parties must disclose all donations received above R100 000 whether in cash, kind (e.g. transport, catering) or both to the Electoral Commission each quarter.
  • The R100 000 is cumulative (multiple donations from the same entity are added together and must be declared immediately when the total value reaches R100k).
  • Parties may not accept donations:
    • Above R15 million per year from a single donor;
    • From foreign governments and agencies (except for training and policy development);
    • From any government department or state-owned entity.
  • Parties must set up separate bank accounts for the deposit of all donations.
  • Within the three (3) months of the financial year end all political parties must:
    • prepare a statement showing all money received by the represented political party from the Funds during the previous financial year, the application of that money and the purposes for which the money has been applied;
    • prepare a statement showing all donations and membership fees, and any levy imposed by the political party on its elected representatives during that financial year; and
    • submit those statements and the books and records of account to an auditor appointed.

Obligations of donors

  • Donors must disclose to the Electoral Commission all donations above R100 000 whether in cash, kind (e.g. transport, catering) or both within 30 days of making the donation.
  • The R100 000 is cumulative per year (multiple donations from the same entity are added together and must be declared once the total value reaches R100 000).
  • Each individual donor can only donate a maximum of R15m to a party in a single year.

For further information see www.elections.org.za

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