Star 2025-02-27

Many African countries have tax-to-GDP ratios well below 15%, a threshold commonly seen as the limit for sustainable fiscal management, but there is good potential to improve revenue mobilisation without directly raising taxes, delegates heard at the G20 Finance Minister’s meeting in Cape Town. The discussion is particularly relevant for South Africa at this time because, last week, in an unprecedented event, the South Africa government postponed the tabling of its Budget due to political opposition to a proposed 2% hike in VAT. It became clear that other sources of raising government revenue might be required. No quick-fix solutions were provided by the meeting delegates, however. Speaking at the meeting that was held in Cape Town on Wednesday, South African Revenue Services commissioner Edward Kieswetter said that much had been…

Economists believe that headline inflation remains well-contained despite a slight acceleration Consumer prices in South Africa are expected to remain subdued in the first half of 2025 in spite of headline inflation starting the year on the upswing. Data from Statistics South Africa (Stats SA) showed that the rate of headline consumer price inflation (CPI) rose for the third month from 3% in December 2024 to 3.2% in January 2025, the highest in four months, compared with market forecasts of 3.3%. Still, it remains well below the South African Reserve Bank's preferred midpoint target of 4.5%. The January CPI is the first to incorporate the changes to the CPI bar scale and weights that Stats SA announced last month. The data was released using the new base year 2024, replacing…

The Household Affordability Index revealed a mixed bag of outcomes for South African families struggling to make ends meet. Data was released on Wednesday by the Pietermaritzburg Economic Justice & Dignity Group (PMBEJD) that showed in February 2025, the average cost of the Household Food Basket was R5 313.22. While the food basket price showed a decrease of R120.48 (-2.2%), from R5 433.70 in January 2025 to R5 313.22 in February 2025, year-on-year the price had increased. Year-on-year, the average cost of the Household Food Basket increased by R35.92 (0.7%), from R5 277.30 in February 2024 to R5 313.22 in February 2025. In February, of the 44 foods tracked in the basket, 11 foods increased in price, and 32 foods decreased in price, and 1 food, oranges, remained unchanged, it…

Barloworld stocks plunged by more than 5% in afternoon trade on the JSE on Wednesday following a vote against the R23 billion takeover bid by a consortium involving management of the company and Saudi Arabian company, Zahid. Barloworld CEO, Dominic Sewela, has been criticised for pushing for the takeover of the company by Zahid. The board of Barloworld approved the bid by the Zahid consortium a few weeks ago but shareholder disagreements have dogged the transaction, culminating in a no vote from shareholders on Wednesday. Shareholders in Barloworld voted against the acquisition and also rejected a motion to pay fees for independent board members at an extraordinary general meeting held on Wednesday. Sewela is enlisted as a director of Newco, which was the acquiring company, with Zahid also having shares…

Steinhoff’s indirect move to create a subsidiary called Hemisphere to consolidate its properties was to decrease the amount that the company needed to pay in tax through frequent changes in the unit’s shareholding. This is detailed in a comprehensive PwC probe, a copy of which is in Business Report’s possession, which was instigated as the result of Steinhoff’s auditors, Deloitte, flagging accounting irregularities in 2017. Hemisphere was incorporated on June 25, 2008, as an “entity limited by liability” in the Netherlands and holds a significant portion of Steinhoff Group’s properties in Europe, a lengthy report by PwC into Steinhoff Group’s accounting manipulations noted. Between the date it was incorporated and just more than a year later, Hemisphere’s majority shareholders changed four times before Steinhoff Finance finally gained full ownership in…

In a promising sign for the South African hospitality sector, the tourism and hospitality industry in South Africa has hailed the 12.1% year-on-year increase in income derived from tourist accommodation for December 2024. This growth, albeit slightly less than the previously revised 12.9%, coincides with a broader year-on-year increase of 11.8% for the fourth quarter of 2024 compared to the same period in 2023. Recent data from Statistics South Africa (Stats SA) showed that the hotels category was the largest contributor to the overall increase, adding 8.1 percentage points to the 12.1% rise with its own robust growth of 13.6%. Furthermore, the “other” accommodation segment – which includes lodges, bed-and-breakfast establishments, and self-catering options – contributed an additional 3.5 percentage points. According to the Minister of Tourism, the ongoing growth…