CAPE TOWN — South Africa will not surprise mining companies with sudden new taxes, although it may adjust existing tax codes, a leading government minister said.
“If there is to be change, I’m pretty sure the Finance minister and department of mineral resources will take a long-term view and not impose this one fine morning,” Trevor Manuel, the National Planning minister told delegates at a mining conference in Cape Town.
“I don’t think that surprises are good for an industry like this and this is likely to be the trend taken by the government in introducing change,” he said.
South Africa’s ruling African National Congress (ANC) has commissioned a study on the nationalisation of mines, which has yet to be completed. Local media reports have said the study will reject nationalisation and come out in favour of higher taxes and royalties.
Manuel said it was critical sensible taxation exists to extract rent from the industry and invest in South Africa’s development.
The Mineral and Petroleum Resources Development Act has a royalties component that already adds to the country’s tax regime.
“That it can be improved on is in little doubt.
Whether the levels are correct or not is also open to debate, but the basic elements are there and is sufficient a platform to build on,” he said.
Manuel said the country’s Bill of Rights recognised property rights and that if these were removed, the state would need to pay for it and then would not have money to invest in health or education.
“Nationalisation, apart from everything else, will also require significant investment to advance in the industry. The country doesn’t have the resources; it clearly is not a smart strategy,” he said.
ANC secretary-general Gwede Mantashe said on Monday the 600-page research document would look at how best to use the country’s mineral wealth to benefit the public.