The task team appointed to assess the fiscal regime applicable to windfall profits in the liquid-fuel sector is expected to report to government only at the end of September, Minister of Finance Trevor Manuel said on Friday. It is also premature to comment on the impact of the proposed tax.
In a written reply to Democratic Alliance (DA) MP Sarel van Dyk, who asked whether his government envisaged the introduction of “such taxation”, the minister said: “Since the task team is still busy with its work … I am not in a position to respond as to whether government envisages the introduction of any such tax at this stage.”
He noted that the terms of reference of the task team listed four possible interventions to be considered “of which a windfall tax is one, although the task team may also consider other possible interventions”.
“The detailed terms of reference and a discussion paper developed by the task team are available on the National Treasury website,” he said.
Asked by Van Dyk whether such taxation would be applicable to the production of bio-ethanol, bio-diesel, Sasol and imported fuel and what the relevant details and the costs involved were, Manuel said it was premature to answer this question.
He also said it was premature to reply to Van Dyk’s question whether such taxation would bring about “inflationary results”, which may subdue the endeavour to achieve a 6% economic growth rate. — I-Net Bridge