Gordhan Says No Plans on Mining Taxes in South Africa
By Andres R. Martinez & Francine Lacqua - Jan 23, 2013 6:34 AM ET
South African Finance Minister Pravin Gordhan said there’s no immediate plans to increase mining taxes after the ruling party last month proposed the government extract more revenue from the industry.
“There is no question of any taxes at this time,” Gordhan said in an interview on Bloomberg TV at the World Economic Forum in Davos, Switzerland. “We will keep the matter under review and when we think it’s appropriate we’ll see how the regime needs to change.”
At its national conference in December, the ruling African National Congress rejected proposals to nationalize mines in favor of higher taxes in the world’s largest producer of platinum and chrome. The party is considering a “resource rent” tax or higher royalties, Enoch Godongwana, head of the ANC’s economic transformation committee, said at the time.
Higher taxes are “part of a policy dialogue process,” Gordhan said. “Many countries, including South Africa, are asking the question whether the mining royalties are at the right levels, whether the owners of minerals, which are the people of South Africa, are getting the right levels of return.”
The ANC’s record since it took power in 1994 was “very careful fiscal management and tax policy and we will stick to that,” Gordhan said.
Mining makes up about 9 percent of gross domestic product and accounts for two-thirds of exports. The country has an estimated $3.3 trillion of mineral wealth, according to the Department of Mineral Resources.