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Super-tax is based on "superficial analysis", mining companies say
South African mining companies have rejected the ANC's plans for greater state intervention in the sector, Sowetan Live reports. In a report commissioned by the Chamber of Mines of South Africa and presented to the ANC, mining companies say that proposals to increase tax levies on mining companies will result in mine closures, job losses, and place the mining sector at "tipping point" of collapse.
Sowetan has seen the report written on behalf of more than 50 mining companies who belong to the chamber. It was compiled in response to the ANC's own report on State Intervention in the Mining Sector (Sims). The ruling party's report - to be hotly debated at the party's upcoming policy conference - was compiled by experts who rejected nationalisation while recommending that mining companies be slapped with higher taxes.
Sims proposed a 50% super-tax - known as a resource rent tax - on all mining companies' profits in excess of 15% return on investment. It was envisaged this would help the government raise R40-billion revenue. According to Sowetan Live, however, the chamber has said this calculation is not supported by facts, but was rather based on "superficial analysis" that could be detrimental to the whole mining sector.
Read the full article on www.sowetanlive.co.za.
