Senziwe Hlomo
This year’s low corporate income tax payments and ineffective export commodity tariffs could result in a about R50 billion tax collection shortfall.
Corporate taxes have decreased, according to analysts, as a result of businesses spending less on self-generated power during rolling blackouts and Transnet’s logistical errors that have impacted commodity exports.
According to Transnet, the company is in debt crisis and will require a minimum of a R100 billion government bailout to recover and carry out its turnaround plan.
In advance of Cape Town’s Medium-Term Budget Policy Statement (MTBPS) by Finance Minister Enoch Godongwana this afternoon, economist Iraj Abedian discusses the effect of Transnet’s financial woes.
“Transnet has been a source of undermining growth and undermining fiscal revenue because when we currently export minerals when the mines dig it out and they cannot take it to the habour, the harbour is not functioning to get containers being delivered … it’s a disaster.”
Abedian goes on to say, “We’ve talked about and analysed and highlighted it, in terms of the impact in the medium to long term, but the government just ignores the law of gravity and state enterprises have been an absolute disaster.”
