* Profit tax of 50 percent proposed
* Nationalisation would be “unmitigated disaster”
* Tax havens targeted
By Sherilee Lakmidas and Ed Stoddard
JOHANNESBURG/CAPE TOWN, Feb 8 (Reuters) – A study
submitted to South Africa’s ruling ANC to reform its vital
mining sector proposes a 50 percent tax on profits and rejects
nationalisation as an “unmitigated disaster” for Africa’s
largest economy.
Although it delivers a hammer blow to calls for
nationalisation by radical elements in the African National
Congress (ANC), mining houses will be wary of the tax proposals
as they grapple with steeply rising labour, power and safety
costs in the world’s largest platinum producer.
South Africa has a poor track record of translating its vast
mineral wealth into broader prosperity and the government is
under pressure to create badly-needed jobs in the industry
without scaring off the investment it needs.
“Under the current fiscal regime our nation is clearly not
getting a fair share of the resource rents generated from its
mineral assets,” an official summary of the 600-page study
obtained by Reuters said.
“A Resource Rent Tax (RRT) of 50 percent must be imposed on
all mining. It will trigger after a normal return on investments
has been achieved, thus not impacting on marginal or low grade
deposits.”
Continued…
