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SA lost 83 000 companies in the financial & business sector in 10 years

Johannes Wessels@

@johannesEOSA1

The landscape of incorporated South Africa in the financial and business services sector has changed dramatically: in 2007 a total of 222 532 companies in this sector submitted tax returns, but SARS Company Income Tax (CIT) data show by 2016 this figure had shrunk to 139 664: a 37% decline.

The CIT data base records a decline by almost 83 000 incorporated firms.  What happened?

This sector includes banks, money lenders, short term insurance firms and independent brokers, investment advisors, business consulting firms as well as real estate services. Figure 1 shows how the number of firms were relatively stable from 2007 to 2010 before a rapid decline before stabilising again from 2014 onwards.

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The Crusaders, Malema, the Wit Wolf & the Tempe killings: consent to smoke in a dynamite factory?

Johannes Wessels
@johannesEOSA1

Is South Africa trying its best to prompt a South African version of the horrendous Christchurch massacre or an upscale repeat of the callous Wit Wolf killings in Pretoria or those by Sibusiso Madubela at the Tempe Military base in Bloemfontein?   

This week’s xenophobic attacks on foreigners in Durban and the verdict by the Human Rights Commission exonerating Julius Malema from hate speech may in future be described as significant road signs pointing towards tragedies in waiting.

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SA enterprise sector critically ill

Johannes Wessels

@johannesEOSA1

The formal South African Enterprise Sector is critically ill. Were the company tax returns of the 768 000 companies combined and submitted as that of a single entity (say SA Amalgamated (Pty) Ltd) there would not have been any Company Income Tax (CIT) payable to SARS for three consecutive tax years.

SARS data on Company Income Tax (CIT) confirms the private sector is in a dismal state. In the tax years 2014 – 2016 assessed joint losses of all companies surpassed joint taxable income by R445 billion.

SARS data on CIT from 2007 to 2016 on assessed CIT returns bring the following to the fore (see Figure 1 below):

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Guarantees for Eskom & SAA… some lessons from Zimbabwe

This video explains Economics by the State quite well.

A BEE service contract for air-conditioning more important than smooth functioning Deeds Office

Johannes Wessels

@johannesEOSA1

Awarding a service contract for maintenance work on air conditioners to a single BEE service provider was apparently more important than keeping one of the key institutions of a market-based economy ticking, namely the Deeds Office in the Free State.

For a full week (7 to 14 January 2019), no registration of title could be done and according to conveyancers, the system is still not functioning well. A conveyancer practising since the early 70s, it was the first time this has happened. This standstill has immense implications:

  • Delays in sellers obtaining their income, thus losing investment opportunity and interest;
  • Estate agents not receiving their expected income and thus resulting for several of them in additional financing costs;
  • Conveyancers foregoing fees and income;
  • Construction work for new or remedial work being delayed.

Public Protector

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Ten wasted years: Preferring “Dumbing Down” to “Productive Knowledge”

Johannes Wessels

@johannesEOSA1

TEN WASTED YEARS…  Tito Mboweni’s colloquium “to think outside the box about economic growth” is akin to closing the stable door after the racehorse had not only bolted, but already won a race elsewhere. Scavenging in the ANC dustbin of rejected advice, Mboweni picked Harvard economist Ricardo Hausmann as advisor, knowing well Hausmann’s advice on productive knowledge had been flatly ignored by the ANC Government since 2008.

Hausmann considers productive knowledge as the key factor that separates successful countries from unsuccessful ones. A lack of productive knowledge therefore retards economic growth and development.

From 1990 to 2003 South Africa lost 7% of its professionally qualified people, predominantly high-skilled whites.  After some stability that came during the high growth Mbeki-Manuel years the exodus was re-triggered by the growing ineptitude of an administration that radically transformed departments and state-owned enterprises (SOEs) into little more than facades.

The police service, SAA, Transnet, the NPA and municipalities are some examples where cadre deployment trumped productive knowledge. The result:

  • At township level, the disgruntled resorted to service protests.
  • At professional level, they packed their bags and headed to the emigration counter with highly skilled blacks now outnumbering their white counterparts, bound in solidarity by a deep non-racial gatvolheid in the slide into corruption, lawlessness, dismal public services and the undermining of property rights. 
  • At investor level, South African businessmen have emigrated through FDI:  fixed investment by South Africans abroad exceed fixed investments lured to our shores.
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Make BEE growth compatible

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