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'Dump BEE for pushing up inequality among blacks'

By Mpho Sibanyoni, Business Reporter | 2017-04-21 09:38:59.0

Finance Minister Malusi Gigaba's economic adviser Professor Chris Malikane believes the government should introduce a raft of changes to achieve economic transformation.

These include scrapping both Black Economic Empowerment and the National Development Plan (NDP) and raising corporate taxes.

"The NDP will not take us anywhere and BEE did not work because today we are crying about a lack of black enterprises," said Malikane in an interview with Sowetan.

"A large chunk of the BEE value is embedded in white establishments. You take me and give me shares and give me a loan to buy shares from you.

"There are black farmers who are struggling and I believe they are the ones who should be supported by government. Due to BEE, inequality among black people has risen in SA."

The Wits University academic said he was yet to conduct a study on the desired tax rate increase. He, however, argued that during apartheid, established businesses paid higher taxes while "they were also happy" to fund the system.

"The companies were also not allowed to take money out of the country. But under the democratic state, corporate tax is lower, [but] the companies are not investing domestically.

"I think the tax of the monopolies dominant in SA needs to be increased because a large chunk of tax is trapped in profits and you find that chief executives get paid [100 times what they deserve]."

Malikane decried that SA had a high rate of informal entrepreneurs who lived from hand to mouth. This, he said, was a result of black people being marginalised by whites.

". there needs to be a complete restructuring of economic ownership patterns and access to land."

He said businesses in high crime areas or where unemployment is 80%, should be given tax concessions and subsidies. "Businesses run away from townships due to crime and those operating despite those challenges need to be encouraged or our people will languish in the margins of the economy."