South Africa not bent on following Aussie lead, shoots down notion of a similar mining tax
South Africa is not about to follow the lead of the Labor-led Australian government as the country's mines minister ruled out the possibility of a new mining tax similar to the proposed minerals resource rent tax, now in limbo as politicians struggle to form a government out of a hung parliament.
Attending the Paydirt Africa Down Under conference held in Perth on Wednesday, South Africa Minister of Mineral Resources Susan Shabangu told reporters that the idea of imposing such a similar tax was not even considered in her country.
Ms Shabangu maintained that the South African government would not even think of running into the same path that the Australian government has decided to take, for fear that the same political trouble that hit the Labor party may strike them as well.
The South African minister was clearly alluding to the political woes that befell the Labor government following its proposal of a mining tax that would have levied a headline rate of 40 percent on Australia's mining companies.
The move was largely regarded as the major cause of Kevin Rudd's ouster as prime minister and the deadlock that ensued after the federal elections, which his predecessor, present Prime Minister Julia Gillard, had called to obtain a fresh mandate.
Ms Shabangu admitted that her nation has had its shares of struggles on the issue of taxation in 2001 and they are now wary of introducing any measures that would impact the country's economic and political stability.
She said that any new tax proposal must be pitted against "the context of the economy of the country and what are the implications if we have to impose any particular tariff on the mining sector."
For now, Ms Shabangu said that her nation is studying ways to plug some holes on South Africa's existing mining legislation and chief of them were proposed revisions on the approval time for mining licenses, from 12 months to six months and for prospecting licenses, which would be reduced from six months to three months.