admin“The moment the possibility of profit decreases, for example when a super tax is levied, investors’ enthusiasm diminishes along with it,” said Piet le Roux, senior economics researcher at the Solidarity Research Institute.
“The people who bear the brunt in this case are employees in the mining sector, because they are less in demand, and ultimately the consumers, because fewer goods and services are offered at low prices,” he said.
Solidarity issued the warning as the four-day ruling African National Congress Police Conference was drawing to an end following heated debates on political and economic issues, including the nationalisation of mines.
According to an ANC-commissioned study released on Thursday, the nationalisation of mines would cost South Africa 1 trillion rand (about US$120,4 billion), a price the government could not afford.
Taking this into account, the notion of nationalising mines should be abandoned, the study said.
The study instead proposes a 50 percent tax on all “super profits” from mining companies and a reduction of royalties from 4 percent to 1 percent. —Xinhua.
Online Reporter