* Profit tax of 50 percent proposed
* Nationalisation would be “unmitigated disaster”
* Tax havens targeted
(Adds industry reaction)
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.
Since the end of white-minority rule in 1994, South Africa
has struggled to ensure its vast mineral wealth benefits all of
its 50 million people, and lavish spending on government job
creation schemes has alarmed investors.
The mining sector – the fifth-biggest in the world by value
– has long been in the government’s sights.
“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.
Continued…
