'SARS should waive power tax'

Johannesburg - The huge increase in the electricity price was the result of poor planning and management on the government's part, so it should not be allowed to get tax income from that, the Business Day reported on Friday.

The government would get a R4bn boost in taxes if Eskom was
allowed to increase its prices by a nominal 60%, the newspaper said.

If the National Energy Regulator of SA (Nersa) grants the hike,
Eskom has projected that it would make a pretax profit of R12.7bn.

At a tax rate of 28%, the extraordinary tariff hike would
generate almost R4bn in tax, which would see the government profiting from its own bad judgment.

The newspaper quotes an unnamed director of a listed company as
saying: "If the tariff increase is granted it will constitute a steep tax on consumers, due to a situation created by the bad planning of the state. This is ridiculous. SARS should waive the tax."

Ernie Lai King, head of Deneys Reitz Tax Services, told Business
Day: "Eskom is owned by the government, which dropped the ball,
precipitating the energy crisis. It is not fair that the government is taxing the increase. In fact, it is not fair that it taxes Eskom at all."

Nersa's regulator for electricity, Thembani Bukula, said the
possible restructuring of Eskom's tax rate had not been discussed between Nersa, Eskom and SARS.

- Sapa