• 10 tips to find bargains

    Susan Erasmus gives advice on how bargain hunters can get the most bang for their buck.

  • Inside Labour

    Labour's bitter breaches need to be seen in historical context, says Terry Bell.

  • Rich getting richer

    Economists differ on how to tackle the chasm between rich and poor, says Leopold Scholtz.

See More

Solidarity warns ANC over mining tax

Jun 29 2012 14:08 Sapa

Related Articles

Manuel: No surprise mining tax

Burying nationalisation

ANC warms to Chile mines policy

SA mining loses out despite tax regime

Australia's mining 'super tax' in doubt

ANC moots mining wealth fund to curb rand


Johannesburg - Trade union Solidarity warned on Friday that a proposed mining super-tax could hamper job creation in the sector.

The proposal for a 50% super-tax on profits exceeding about 15% would discourage new development, said Solidarity Research Institute senior economics researcher Piet le Roux.

The tax threshold would be calculated on the treasury long bond rate plus 7%.

According to the document's authors, such a super-tax could be expected to yield about R40bn a year at current prices.

However, Le Roux said market players would adapt their behaviour to less favourable conditions, so the tax yield would almost certainly be less than projected.

"The ANC is fixated on one-year cycles and is disregarding the fact that mining companies have to bear up during long periods of low profitability in order to benefit only now and then from exceptionally high prices," he said.

"Further, the possibility of high profits is desired, as it encourages entrepreneurs to react quicker - rather than slower - to the opportunity to produce useful products and services."

Once the possibility of profit decreased, for example by levying a super- tax, investors' enthusiasm would diminish.

There would be less demand for workers in the sector and consumers would also be affected because fewer goods and services would be offered at low prices.

It would be interesting to see if the ANC's investment arm, Chancellor House, would be in favour of paying 50% tax on any return above 15%, he said.

Solidarity was concerned that the ANC was sticking to its view that economic growth had to be based in government initiatives.

"In an already tough economic climate, current and proposed state interference is responsible for inhibiting growth in the mining industry," said Le Roux.

solidarity  |  sa economy  |  job creation  |  mining tax  |  mining



Read Fin24’s Comments Policy

24.com 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
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Top 10 richest musicians of all time

Check out the gallery to find out who they are!


Luxury living

Seven of the most expensive children's toys ever made
5 millionaires turned murderers
The youngest billionaires in the world and how they made it
Watch: Flying first class has never been this luxurious!

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How do you see your boss? He/sheis:

Previous results · Suggest a vote