Pretoria – As Finance Minister Enoch Godongwana gears to table his much anticipated Medium Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, lobby group the SaveSA Smelters campaign has appealed to him to “save the South African economy” by levying tax on the exportation of chrome ore.
Results of a study released this week by the Business School of the North West University (NWUBS) has supported the perennial SaveSA Smelters campaign, concluding that a differentiated export taxation on chrome ore will increase domestic ferrochrome production, which, in turn, will support the South African economy by creating employment opportunities, increasing local spend, driving development, and adding to the value chain.
“We would like to extend a word of gratitude to the North West University for having done such a tremendous job of compiling a detailed research on the advantages of implementing an export levy on our minerals,” said Elias Mokwana, spokesperson of SaveSA Smelters.
“It has been a call by the Save SA Smelters campaign that this implementation is long overdue. We are, therefore, calling on the Minister of Finance (Godongwana) to say, you, minister, have everything to rescue this country. You have everything to save us as South Africans, and you have everything in your hands now to rescue our economy and the smelting industry by implementing the export levy on our minerals.”
Last month, the day of Godongwana’s tabling of the Medium Term Budget Policy Statement in Parliament was amended to Wednesday, shifting it from November 4, as per earlier indications.
This came after National Assembly Speaker Nosiviwe Mapisa-Nqakula accepted Godongwana’s request for this amendment to the National Assembly programme.
“We are anxiously awaiting your Medium Term Budget Policy Statement, which we are so hopeful that in it you will announce the date of the implementation of the tax.”
“Fellow South Africans, we are a mineral-rich country, yet we are poor. We therefore think and are hopeful that this time Minister Godongwana will do the right thing. Save our smelters.”
Part of the North West University study reads: “Recent case studies on interventions in countries such as Indonesia, India, Russia, Zimbabwe, and many others have shown that, when specific criteria are met, interventions such as export taxation are, overall, positive for the country”.
“In breaking news, the latest taxation applied as an interventionist measure occurred in Indonesia, which has already banned a number of unprocessed ore exports, including nickel, tin, and copper, to stimulate downstream industry development, including batteries for electric vehicles, stainless steel and the aluminium industry.
“The country’s president, Joko Widodo, said the country is planning to “hit the brakes” on the export of all commodities, in efforts to encourage investment and create jobs in the domestic economy. From the research it is apparent that the South African chrome sector meets the criteria to successful implement export taxation; albeit a short-to medium-term intervention to create a period within which to address domestic challenges such as energy.”
IOL