The decision of the National Treasury to give tax-free incentives to those who invest with a dozen big finance concerns, but not afford the same tax-free incentives in special investments to individuals investing in exploration, is snarling up the small end of the Johannesburg Stock Exchange, which is suffering delistings and no new small listings.
The ongoing refusal by the National Treasury to provide similar tax-free incentives to junior mining, for example, is depriving South Africa of investment in its highly prospective minerals endowment. In sharp contrast, the 63 new listings in Australia so far this year tell the story of how tax incentives for exploration benefit the economies of other mining jurisdictions.
The finance companies that benefit from the National Treasury’s tax-free incentives should at least be compelled to be listed. Some may not even be South African domiciled. One is changing its name owing to being acquired by an international company and the subsidiary of another is advertising for consultants able to operate “without the burden” of having to be a registered Financial Services Provider licence holder.