There is no nationalisation, there will be a form of tax

2012-12-23 10:00

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Enoch Godongwana, the head of the ANC’s economic transformation committee, takes Sabelo Ndlangisa through the Mangaung conference’s resolutions on ‘increased state-ownership in strategic sectors’ that have replaced the ‘strategic nationalisation’ of mines and mineral resources.

»?Can nationalisation be applied retrospectively, or only for new projects?

There’s no nationalisation. Just state participation in the strategic sectors of the economy where deemed appropriate on the balance of evidence.

»?So can that involvement apply retrospectively?

My sense is that it is not cast in stone because if you look at the mining sector, for instance, we are talking about (intervening) through the resources, through rent and equity.

There’s nothing that can stop us from buying into existing projects or buying a new one.

It is going to depend on opportunities. We are going to operate like any other entity that is out there in the market.

»?Does this mean where you buy equity the private sector will remain in control, or would the state take operational management?

It would depend from project to project. Where we go for minority stakes it might no be operational.

»?So the state will take over where it has the majority stake?

Not necessarily. I’m saying it will depend from project to project and on the partners as well.

»?When it comes to taxation of minerals, will it be a resource rent tax or tax on superprofits? (The latter is preferred by the industry as it implies you only pay when you are making extraordinary profits. The former is measured against factors like revenue or commodity prices, not profitability.)

We haven’t defined the tax system we are going to use.

We’ve taken a principled view that we might have to capture the rent as the state through the tax system.

»?Cabinet approved the Mineral and Petroleum Resources Development Amendment Bill two weeks ago. Will the new proposals be incorporated into the bill?


»?Why not?

They need fine-tuning, we (still) need to debate and discuss. We are discussing

with the mining industry, we are discussing with everybody.

»? Is there a time frame for implementing the resolutions, then?

No. We need to drill down on them a bit. We may have to do some detailed work on them, and see what we can do.

»?But aren’t you worried that the conference has merely exacerbated market jitters instead of providing certainty on these issues?

No. The policy is clear; no conference decides on modalities. Conferences take resolutions on broad policy parameters. I’m not worried at all. The market will just say: ‘(They) have taken away the N (nationalisation)-word, but they are still going to tax us.’

There’ll be that kind of a mixed reaction.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. 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
Comments have been closed for this article.

Inside News24


Rugby World Cup 2015

All the action from the 2015 RWC, including live coverage of all 48 matches, breaking news, fixtures, results, logs - and much more!


Rugby World Cup 2015

Ireland centre Payne out of RWC
LIVE: Samoa v Scotland
Jones: Japan can be 'team of the tournament'
LIVE: Australia v Wales
Traffic Alerts

The phrase for today is:”Out of the blue.” Expect the unexpected and work with the changeable energy. Your intuition is more

There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.