Brenthurst Initiative
The Brenthurst Initiative was a 2003 policy paper on Black Economic Empowerment in South Africa by Jonathan and Nicky Oppenheimer that called for tax incentives to encourage economic growth and black wealth creation.
The proposal
[edit]The initial, draft proposal release in August 2003 had the stated objectives of boosting South Africa's economic growth rate from 2.7 percent to 5 percent annually, developing a system of tax incentives and penalties to encourage black ownership of companies and businesses and to raise R224-billion to ensure 26 percent black ownership of all equity on the JSE Securities Exchange by 2014.[1]
The tax incentives, on a sliding scale, would be calculated based on a company's rating on a governmental empowerment scorecard and was intended to provide a competitive advantage to racially transformed companies. This was interpreted as a "carrot" to balance the "stick" of legislated transformation requirements and associated penalties.[2]
Reception
[edit]The initiative was first released at a function opened by President Thabo Mbeki[3] and drew praise from Cyril Ramaphosa and Moss Ngoasheng and criticism from Tony Leon and Mangosuthu Buthelezi.[4]
The initial response from some economist and trade unions was described as "downright cool".[5]
The initiative was subsequently criticised for being too limited, for potentially reducing the tax base and for effectively proposing that a black majority government fund the transformation of white-owned businesses.[6]
The Helen Suzman Foundation called the initiative "both good news and bad news".[7]
A 2004 proposal by the South African Revenue Service for tax breaks to companies that give shares to a broad base of employees was considered to be linked to the Brenthurst Initiative.[8]
Notes
[edit]References
[edit]- "Oppenheimers pledge to boost transformation". Independent Online. Retrieved 30 July 2008.
- "A second CODESA?". Financial Mail. Archived from the original on 2009-01-09. Retrieved 30 July 2008.
- "Brenthurst plan under fire". Fin24. Retrieved 30 July 2008.[permanent dead link]
- "Sars proposes tax incentives to encourage black empowerment". Business Report. Archived from the original on December 28, 2004. Retrieved 30 July 2008.
- "Cool response to Brenthurst initiative". Business Report. Retrieved 30 July 2008. [dead link]
- "Oppenheimer to SA's rescue". News24. Retrieved 30 July 2008.[permanent dead link]
- "New debate about transformation has begun, sparked by the Oppenheimer dynasty". Cape Times. Retrieved 30 July 2008.