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Manuel: No surprise mining tax

Feb 06 2012 16:21
Reuters
Cape Town - South Africa will not hit mining companies with surprise new taxes, although it may adjust existing codes on the industry, a leading government minister said on Monday.

“If there is to be change, I’m pretty sure that the finance minister and department of mineral resources will take a long-term view and not impose this one fine morning,” Trevor Manuel, the National Planning minister told delegates at a mining conference in Cape Town.

“I don’t think that surprises are good for an industry like this and this is likely to be the trend taken by government in introducing change,” he said.
 
But Manuel said it was critical that sensible taxation exists to extract rent from the industry and invest in South Africa’s development.

The Mineral and Petroleum Resources Development Act has a royalties component which already adds to the country’s tax regime.

“That it can be improved on, is in little doubt. Whether the levels are correct or not is also open to debate, but the basic elements are there and is sufficient a platform to build on,” he said.

The ANC has commissioned a study on the nationalisation of mines, which has yet to be finalised. Local media reports have said the study will reject nationalisation and come out in favour of higher taxes and royalties.

ANC Secretary-General Gwede Mantashe said on Monday the 600-page research document would look at how best to use the country’s mineral wealth to benefit the public.

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