Mining magnate Patrice Motsepe has advised government to offer more tax breaks in its bid to make the country a more globally competitive investment destination.
Speaking during the Brics Business Forum as part of a panel discussion in Sandton, Johannesburg this week, Motsepe said that, much like the tax breaks given to mining houses in the past, government needed to consider giving corporates more tax incentives.
Brics is a grouping of five major emerging economies – Brazil, Russia, India, China and South Africa.
Motsepe said government should go a step further to lure investors to the country.
“A step further involves introducing tax holidays, tax incentives and tax dispensations that allow significant investments like we used to do in South Africa for the mining industry. You’d spend the first five to 10 years without paying any tax because you write off your capital,” he said.
Motsepe also said the private sector was impatient with progress, as was the case when he was chairperson of the Brics Business Council five years ago.
“There was a sense of impatience on our side, and there continues to be a sense of impatience from the private sector in relation to making sure that this is an exceptional opportunity for South African business to partner with other Brics companies and businesses for purposes of industrialisation and also for the purposes of infrastructure development,” he said, adding that the impatience was related to getting things done, talking about specifics and getting rid of blockages.
Motsepe said the private sector was uniquely positioned to partner with their Brics counterparts and with other countries in Africa.
“If an opportunity for industrialisation makes commercial sense in Africa, it will happen. If an opportunity for infrastructure development makes commercial sense, it will happen,” he said.
There are already a number of tax incentives for corporates.
Motsepe’s counterpart on the stage, Naspers chairperson Koos Bekker, added that the country could learn a thing or two from the other Brics member states.
“An observation in China is the quality of public servants there. When you ask for a meeting with a minister, he enquires for two weeks what you really want from the meeting. When you walk in, he is so well prepared and on time,” he said, praising the Chinese business environment.
Bekker went on to cite examples of how China, Russia and India’s governments had gone on to improve their respective public infrastructures and services to lure investment.
In his opening address, President Cyril Ramaphosa said a notable achievement of the first decade of Brics was the establishment of the New Development Bank, which he said filled a critical gap in project funding across the member states.
“Since its formation, the bank has disbursed loans totalling $5.1-billion (R67.5-billion), with approvals amounting to $1.7-billion this year alone. As we enter the second decade of Brics cooperation, we are determined to expand the bank’s role in economic and social development,” Ramaphosa said.
Ramaphosa also highlighted the fact that the African Continental Free Trade Agreement would present an opportunity for the Brics bloc.
“More opportunities are presented by the agreement to establish the African Continental Free Trade Area, which provides access to a market of more than 1 billion people and a combined GDP of more than $3-trillion. The value of this free trade area will only be fully realised through massive investment in infrastructure and skills development. This presents opportunities for Brics countries, some of which have extensive experience in infrastructure development, and are world leaders in education and skills development,” he said. ― Fin24