By Nick Mann | 15 February 2013
South African President Jacob Zuma has announced a review of tax policies to ensure there is an ‘appropriate revenue base’ to support the government’s spending plans.
Delivering his State of the Nation address yesterday, Zuma claimed that December’s decision by the African National Congress ruling party to abandon plans for nationalising the country’s mines had provided ‘certainty’ for the mining sector.
But, he said the time was now right to look at how mining royalties could ‘suitably serve our people’.
‘Ensuring that the public services we provide our people today can continue to be provided to our people tomorrow requires that we have suitable tax policies to generate sufficient revenue to pay for these services,’ he explained.
‘From time to time, we have commissioned studies into our tax policies, to evaluate the extent to which they meet the requirements of the fiscus.’
‘Later this year, the Minister of Finance will be commissioning a study of our current tax policies, to make sure that we have an appropriate revenue base to support public spending. Part of this study will evaluate the current mining royalties regime with regard to its ability to suitably serve our people,’ he added.
Zuma also reiterated the government’s commitment to the major infrastructure projects he said were needed to help the country achieve its growth targets. South Africa is expected to achieve 2.5% gross domestic product growth this year, down from 3.1% in 2012, but needs rates above 5% to create more jobs, he explained.
Last year’s National Development Plan set a target to create 11 million jobs by 2030, which would require the economy to grow threefold, he noted.
By the end of next month, the South African government will have spent around R860bn ($98bn) on infrastructure since 2009, supporting everything from transport projects to renewable energy development, Zuma revealed.
‘The infrastructure development programme has been a valuable source of learning for government,’ he said. ‘In the year ahead, we will fast-track many of the projects that the Presidential Infrastructure Co-ordinating Commission has announced. The lessons are that we must co-ordinate, integrate and focus on implementation.’
