News24

ANC mining tax reckless - DA

2012-02-05 22:30

Johannesburg - The ANC's support of a super-tax on mining profits was reckless and would kill jobs and investment, the Democratic Alliance said on Sunday.

"We need proposals that will attract investment and create jobs so that everyone can share in the wealth of our mineral deposits," DA MP James Lorimer said in a statement.

"Even the debate itself is discouraging investment at the expense of invaluable jobs."

Such a tax would create incentive for mines to under-report their profits and discourage initial investment in mines, Lorimer said.

The focus should be put on policies that made the mining and benefication industries more competitive.

City Press reported on Sunday that an ANC report on the mining industry rejected nationalisation of the sector, but nevertheless proposed fundamental changes.

Nationalisation would be unaffordable, as the government would need to raise R1 trillion to buy out listed mining companies, according to the report. This exceeded the entire government budget.

50% tax

The proposals included a 50% tax on the sale of mining rights to prevent speculation. A windfall tax of up to 50% on super-profits, defined as a return on investment of 22%, was also included. However, the royalty tax would be reduced from four to one percent.

Five ministries - trade and industry, mineral resources, public enterprises, economic development and science and technology - would be merged to form a super-ministry in charge of minerals governance.

Platinum, a strategic mineral, would be nationalised via "targeted interventions", while the government would participate in the industry to a much greater extent, the weekly reported.

The proposals were likely to be adopted by the national executive committee of the African National Congress, to reassure investors concerned about the prospect of nationalisation, City Press suggested.

Suspended ANC Youth League leader Julius Malema was the party's most vocal advocate of putting control of the country's mines in government hands.

It was adopted as a resolution at the youth league's conference last year. The ANC then commissioned a report into the viability of doing this.

Comments
  • Adam - 2012-02-05 21:48

    Can this government not see that everything they touch goes bad.They cant control themselves, and this supertax would not benefit the poor, as the anc fatcats will spend any extra income on themselves.Please leave private enterprise alone.

      Eduard - 2012-02-06 06:50

      so now kids(ANCYL) tell adults(ANC) how to run a government.... what is next, there is no vision in the current ANC and JZ is absolutely clueless about the future

      Johann - 2012-02-06 07:38

      Kill the goose that layes the golden eggs, comes to mind.

      Tc - 2012-02-06 07:43

      The ANC applies no logic thinking in anything they do. they are driven by an overwhelming desire to plunder, to destroy, and to enrich themselves! Like the Mafia.

  • Francois R Nel - 2012-02-05 21:52

    I really think a stupidity tax is in order. The current government will pay thru ears. Julius will be bankcrupt before the say is out

      Adam - 2012-02-05 22:11

      Francois I think most of the government officials receive most of their income "under the table" and dont declare it.As for stupidity, I have often wondered what the average IQ of an fANCy official is. I laugh and get embarrased whenever one of them speak in or about any 1st world countries. Can you just imagine jakop arriving with all these jets flying around and getting lost.?

  • Louw - 2012-02-05 21:58

    Can't the DA see what is the ANC's plan, get every one upset about super-tax so that investors don't invest in SA mines anymore, the value of the mines go down, the government take over the mines at a very low value. Simple as that.

      Pierre - 2012-02-06 02:19

      No I think it is the other way round with the DA trying to stir and upset everybody; just for their own political greed.

      Mantsho - 2012-02-06 02:33

      No everything about ANC goverment is Reckless! maybe the DA is trying to help them.

      J.D. - 2012-02-06 07:51

      Pierre ...if you know anything about the indexes on the JSE you will see that the mining sector is the only sector who lost value on a year to year basis. I guess you are to stupid to understand why.

      Pierre - 2012-02-06 08:25

      @JD – Let me see. The mining sector is down cause the mines have been nationalised. No, no, it is down cause the mines are being run by Malema, ahmm no. They are down cause they are run by the ANC, ahmm no. By just focussing on the Gold sector; They were struggling cause of aging mining infrastructure, declining ore grades, increased operating cost as deep-level mines are more costly. Come-on, these were ongoing issues for most of this decade, and not cause of “recent political developments”. (Yes I actually do follow business reports on the JSE)

  • Bennie - 2012-02-05 22:14

    This is very characteristic of the common sub saharan velcro crested wallet snatcher. Not particularly entrepreneural or hardworking , but definately eager to share in the spoils at others expense !!

      Adam - 2012-02-05 22:40

      I just love the species description.

  • Cracker - 2012-02-05 22:34

    One probably doesn't have to be a scientist of expert in the various fields relevant to know that the developments of material creation is taking place at an astonishing pace. In ten or fifteen years nobody may be interested in platinum or uranium. Rather open up and make hay while the sun shines.

  • Eish - 2012-02-05 22:57

    When mining investor thought their sleepless nightmare called nationalization is dead and buried the other one resurrect and emerges as super tax in mining.

      Scouter - 2012-02-05 23:11

      Legalsed banditry under a different guise, Kgomotso.

  • Scouter - 2012-02-05 23:09

    The stupidity of this suggestion is breathtaking and displays an ignorance of galactic proportion. More job losses and poverty on the horizon of the fading mining landscape.

  • Francois - 2012-02-05 23:18

    They must be mad! To invest in SA's mining sector you'd have to put up 100% of the capital, take 100% of the risks, but can only share in max 37.5% of the profits. 50% to govt, and 25% of remaining 50% to BEE.

      Scouter - 2012-02-06 00:37

      As Eva Peron once famously remarked when hijacking enterprises for her own nefarious ends "Accountants only slow things down, figures get in the way". Eva would have done well in the ANC I suspect.

  • Pierre - 2012-02-06 02:10

    Somebody must tell the DA that if one cry wolf too many times people are going to stop paying attention…I fully agree discouraging investment is bad, nationalisation is disastrous for any economy, but were we not here not long ago with the DA crying wolf on some worst case scenario that was never seriously considered for implementation. Critique is necessary, but we also need responsible opposition.

      jody.beggs - 2012-02-06 10:49

      Where there's smoke there's fire , not crying wolf !

  • oclee62 - 2012-02-06 03:31

    Why follow the Australians? RSA should show more logic!!!!

  • Manny - 2012-02-06 04:17

    I believe that a "Super Tax" on mining profits is a good idea.......and will be a great benefit to the country in the mdium to long term....The DA and the "anti everything" lobby should refrain from using this as another opportunity to attack the government.....the "Super Tax" (on mining profits)concept is a great one (for those who undestand economics). I understand that Australia is in the process of implementing a similar tax regime.....

  • Peter - 2012-02-06 06:01

    If we had a government that had shown it was capable of anything, nationalising the mines could be a good thing. I'm all for taxing the wealthy more, amazing how in the USA the normal oke on the street is taxed more than the super wealthy. The system is designed to protect the interests of the super greedy. Unfortunately we have seen the ANC is also a protector of its own elite gluttons, so I don't have much faith in the "extra" tax getting to the people who need it most.

  • jan.roodt1 - 2012-02-06 07:10

    Well they must find a new source of income to make up for all the "budget shortages" and they must of course also boost the "shared pool" - always new people coming on-board who need to get rich.

  • Jones - 2012-02-06 07:10

    This issue need a lot of research. As the ANC said , they will check with other countries to see how they deal with mines. Higher TAX wont solve the problem and some people have only selfish interest because they have invested in the mining shares. Let the mineral resources benefit everyone, not the tiny minority, i.e particularly whites and some ANC fatcats

  • J.D. - 2012-02-06 07:47

    To build something you have to be creative. To be creative you need to have some brains. To destroy you do not need either. These guys are hellbound on destroying the mining sector, not through nationalisation then through taxation. They do not know what they are doing.Sad

  • Thandeka - 2012-02-08 15:32

    We want to create jobs whilst we do things that destroy jobs! I had an opportunity to attend a presentation by the High Commissioner of Sli Lanka...wow I wish we could send govt to Sri Lanka for training on governance. The unemployment rate is sitting at 6 percent in SL whilst they were colonised by the British,Portuguese and the Dutch and they are second fastest growing economy in the world after China!With a similar history like SA!

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