An evaluation of selected changes proposed in respect of the South African mining tax regime

Abstract

The South African mining tax regime is a fairly mature legislative framework. The legislator has made numerous changes to the legislation in order to respond to the trends of the industry. This framework has arguably been behind the substantial contribution of the mining industry to the South African economy. Recent trends have seen numerous jurisdictions especially in the African continent changing and in some instances completely replacing their entire framework with new legislation. South Africa has recently come under pressure to make substantial changes to its mining tax framework in a manner that mere legislative amendment might not suffice. This follows the recommendations of inter alia the ruling party, African National Congress which proposes changes to the mining tax regime. Due to the fact that the proposed changes could have a significant impact on the mining industry as well as South Africa as a mining nation, the state has established the Davis Tax Committee to investigate the viability of the proposed changes as well as the advantages and disadvantages thereof. The Davis Tax Committee has made interim recommendations which at most are in favour of retaining the status quo and making minor changes to the current mining tax framework. Prior to making an evaluation of the recommendations made by the Davis Tax Committee it is necessary to lay the basis of the recommendations which includes giving an overview of the current mining tax regime as it is and thereafter discussing the calls for change in the said regime. The purpose of conducting this study and evaluation is to make recommendations in response to the calls for regime change as well as the Davis tax Committee's recommendations in respect of the proposed change.