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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.
