Competitiveness – Page 2

Anti-business, Company tax, Competitiveness, Construction services, Crime against business, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Enterprise profitability, Financial services, Investment/Divestment, Large enterprises, Real estate services, Small and medium enterprises (SMEs), Small enterprises, Trading services

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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Company tax, Competitiveness, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Enterprise profitability, Expropriation without compensation, Financial services, Large enterprises, Medium sized enterprises, Small and medium enterprises (SMEs)

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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Business incubation, Central planning, Competitiveness, Developmental state, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise regularities, Expropriation without compensation, Job creation and unemployment, Land ownership, National Gazelles Programme, Preferential procurement

White Monopoly Capital: astute reverse double somersault or a Janus performance?

Is the presidential acknowledgement of entrepreneurs as heroes and not villains the equivalent of Pope John Paul II’s admission that the church was wrong to condemn Galileo for endorsing a helio-centric view? If so, it is one of the most astute political reverse double summersaults. As deputy-president Mr. Ramaphosa himself sung heartily the “Down with White Monopoly Capital” song in the Zuma choir.

Janus Ramaphosa

Does the comment during the dinner of the Investment Summit really signal the dawn of economic freedom or was it merely a modern manifestation of Janus? Will the future reveal a Ramaphosa butterfly that was an ugly caterpillar under Zuma or is the two-mouths-two-messages the real reality?

The first requirement to assess future options is a proper understanding of the present. Let us explore that by assessing the ANC Government’s (and Ramaphosa’s) views on SMEs: does it indicate an embrace of private initiative or something else?

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Business and economic indexes, Competitiveness, Credit risk ratings, Crime against business, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise research, data and statistics, Expropriation without compensation, Job creation and unemployment, Land reform, Property rights, Public service delivery

Government sabotages growth through property rights uncertainties and ignoring Moody’s warning shots

The heated debate between proponents of property protection and those in favour of confiscation (expropriation without compensation) has been characterised by a lack of data and waged mainly on ideological and emotional arguments. The lack of an acceptable factual basis is evident in:

Government, AgriSA and Afriforum operating with different figures for categorising land ownership according to race;
The number of farms on the list for the first round of expropriation. (If there was such a list).
Uncertainty about the number of recipients of free subsidy houses (where transfer of title has not taken place) and how these properties should be counted.
Arguments that expropriation would kill the economy simply being countered with promises that the economy would not be harmed.

At the public consultations the facts applied were almost always derived from (and limited to) local situations and narratives with no or little attention to systemic information. EOSA therefore analysed last year’s WEF’s Global Competitiveness Index (as part of our enterprise research on relevant data and statistics) to assess whether there are some global indicators to inform the debate. Several significant correlations are evident from the WEF data:

Highly competitive countries have strong protection of property rights.
High per capita GDP goes hand-in-hand with property rights.
Poor policing and high cost of crime for businesses are not characteristics of highly competitive countries.

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Anti-business, Business and economic indexes, Competitiveness, Cooperatives, Crime against business, Enterprise friendly environment, Job creation and unemployment

Zuma, Gigaba & Zwane contribute to SA’s slippage on WEF’s Competitiveness Index… in “favouritism in public decisions” SA ranks amongst the worst

Were it not for the relative good performance of South Africa’s private sector, the slippage by 14 places on the WEF’s World Competitiveness Index would have been much much worse. And there is strong evidence that Jacob Zuma, Malusi Gigaba and Mosebenzi Zwane each pulled their weight in efforts to contribute to lower rankings on some of the indicators… Continue reading “Zuma, Gigaba & Zwane contribute to SA’s slippage on WEF’s Competitiveness Index… in “favouritism in public decisions” SA ranks amongst the worst” →