Dec. 19 (Bloomberg) -- A South African ruling party commission rejected the wholesale nationalization of mines, while backing proposals to collect additional revenue from profitable companies, according to two officials on the panel.
A study published by the African National Congress in February called for a 50 percent “resources rent tax” on all mining operations, triggered once companies earn returns in excess of about 15 percent annually. The tax would generate about 40 billion rand ($4.8 billion) at current prices, according to the study. It concluded that the seizure of mines would be “an unmitigated economic disaster” for the country.
At a policy conference in June, the party failed to reach agreement on new taxes or how they would be implemented, referring the issue to its national conference which is taking place this week.
The party’s Economic Transformation Commission agreed to impose additional levies, yet didn’t discuss the issue in detail and added little to proposals agreed to in June, said the two officials, who declined to be named because the proposals haven’t been presented to ANC members at the conference.
The commission’s report still has to be endorsed at a plenary session of the ANC conference before it is adopted as party policy. Enoch Godongwana, the head of the ANC’s Economic Transformation Committee, declined to comment on the proposals.
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