[miningmx.com] – FINANCE Minister Pravin Gordhan’s budget review for 2013 still did not give any clarity on whether there will be additional taxation on mining companies operating in South Africa.
The ANC adopted a resolution at its 53rd national conference in Mangaung in December last year in which it stated that mining companies pay a resource rent tax of 50% on all mining activities.
This has been met with concern from stakeholders in the industry who warned the industry already carries a heavy tax burden by paying extensive royalty taxes.
Chamber of mines economist Roger Baxter earlier told MPs at parliament last week that the industry contributed R5,5bn in royalties, which constituted 17.2% of all corporate taxes paid in the country in 2011 alone.
In his 2013 budget review, no provision has been made of a resource rent tax in the mining sector. National treasury acknowledged that the mineral and petroleum royalty regime has broadened South Africa’s tax base and allowed for increased revenues.
A study into South Africa’s tax regime will soon be conducted which could mean that a resource rent tax may be imposed in future. “The broader review of the tax system will consider whether this (royalty) approach is sufficiently robust and assess what the most appropriate mining tax regime is to ensure South Africa remains a competitive investment destination,’ the budget review stated.
At a media briefing ahead of his 2013 budget speech this morning, Gordhan acknowledged that mining is a very important part of South Africa’s economy.
“It employs hundreds of thousands of people it is almost 50% of mineral exports,’ he said. “But the tax committee will among other things also consider taxation in the mining sector.’
