Investment ambassadors can try, but SA company losses exceed taxable income

Pres Ramaphosa’s announcement that four special ambassadors – including well respected Trevor Manuel – are to roam the globe in an aggressive pursuit of foreign investment  “… like a pack of lions”, appears to be premature. It would have helped these ambassadors if they could have had a better story to tell than one of a business environment with stagnating profitability and growing losses where:

  • only 25% of firms have earned sufficient to be liable for company tax;
  • firms with a taxable income below R10 million decline at a rate of 31 per week;
  • a mere 635 companies are responsible for 77% of company tax;
  • from 2009 to 2015 company losses as submitted to SARS increased by 85% and for the last two years were higher than the taxable income assessed.

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Ready to choose a San hunter rather than a Sherpa guide for mountaineering? Dlamini-Zuma on Radical Economic Transformation

When Nkosazana Dlamini-Zuma announced her Manifesto for Change, she reminded me somewhat of the stern Mother Abbess singing “Climb every Mountain” for Maria (Julie Andrews) in The Sound of Music.

Definitely not her voice, but her words… Dlamini-Zuma summoned support for Radical Economic Transformation (RET): “We must know which hills to tackle next. …(t)hese are the mountain of economic transformation, the highland of land redistribution and the summit that must see us educating and skilling our people. If not, the negatives will swallow the gains we have made.

Mother Abbess

Marvellous libretto…

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A LED puzzle

Looking for workBecause of high unemployment and poverty levels, all South African municipalities have been tasked to promote local economic development (LED) as part of their integrated development plans (IDPs). Various central and provincial government departments, organizations such as SALGA as well as consultants provide LED guidance and support to the municipalities. And academics do research on LED and small towns in South Africa and publish their results in scientific journals. Yet, given the above, there is an aspect that really puzzles us.

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Of enterprise richness in South African towns

In two recent publications in the South African Journal of Science, we explored the enterprise richness, defined as the number of different enterprise types, of South African towns:

Enterprise richness as an important characteristic of South African towns; and
The enduring and spatial nature of the enterprise richness of South African towns

Remarkable and enduring regularities were observed between the number of enterprise types and the total number of enterprises in towns.

Picture 1Log-log relationships which endured over 70 years were recorded and these relationships raise important issues about the nature of entrepreneurship and its dynamics in different-sized South African towns. The figure shows such a relationship that covers a range of villages with fewer than 10 enterprises to towns with 350 enterprises.

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