Flash Briefing: SA tax crunch as high-income earners emigrate; SANDF in Covid scandal; Massmart; Bitcoin

As Finance minister Tito Mboweni gets set to present the budget this week, analysts have warned that South Africa’s loss of skilled and high earners could limit room to raise income taxes as the Treasury seeks to plug a budget shortfall that’s above wartime levels, says Bloomberg. A (fourth-quarter estate agent) survey by FirstRand’s First National Bank shows more than fifth of all houses valued at R2.6m ($176,939) or more that were put on the market by the end of last year was because people were planning to emigrate. This could further erode the tax base in a country where fewer than 14 million individuals in a working-age population of 39 million are registered taxpayers and where those earning more than R1m a year pay 40.2% of all personal income levies.

The opposition Democratic Alliance has launched a petition to stop the Expropriation Bill in its tracks. The ANC wants to push through Zimbabwe-style land grabs – which are seen as a huge threat to the economy. The DA warns that the legislation the ANC would like to push through Parliament. Among the DA’s concerns:

  • It has a list of five circumstances where zero compensation could be paid but it allows government to extend this list endlessly.
  • It offers government near unlimited powers to simply expropriate personal property – even going so far as to suggest that copyrighted and patented property could be at risk.
  • It is weighted in favour of the ANC government, whose reputation for greed precedes them.
  • It provides very little in terms of oversight opportunity by experts to ensure fairness to ordinary South Africans.
  • It will clearly and severely impact property rights and cannot be trusted in its present form to a corrupt government.

South African National Defence Force senior generals thought the country was involved in a biological war, which caused them to buy R260m worth of useless medicine from Cuba to fight Covid-19, reports MyBroadband.co.za. These generals saw themselves as a first line of defence in this biological war and wanted to be injected first with the Heberon Interferon alfa-2b medicine, Rapport reported. These bizarre facts emerged during a session of the Parliamentary Portfolio Committee on Defence and Military Veterans. Last year, media reports revealed the SANDF spent millions on Interferon alfa-2b (Heberon Alfa R) from TecnoImport, a Cuban state-owned company – despite the Department of Health banning it from being used to treat Covid-19. To add insult to injury, around 40% of the consignment of Heberon Alfa R was lost because the cold-chain supply was not adequately managed. It was illegal for the SANDF to import medicines without the required permission, and the Auditor-General and the Hawks have since launched investigations into the issue.

South African retailer Massmart said on Friday it was planning further store closures and flagged a deeper full-year net loss of more than R1.7bn ($116.8m). The Game and Makro owner estimated that lockdown curbs, including extended restrictions on liquor trading, lowered its 2020 sales by at least R6bn year-on-year.

Bitcoin surged to another record on Saturday after reaching more than $1trn in market value for the first time, leaving some of its biggest backers in a state of wonderment, says the Wall Street Journal. In a tweet, Elon Musk said Bitcoin prices “seem high.” The world’s richest person was replying to Peter Schiff – a crypto skeptic and gold bug – who said the precious metal is better than Bitcoin and fiat money. “Money is just data that allows us to avoid the inconvenience of barter,” Musk tweeted. “That data, like all data, is subject to latency and error.” In a following post, he added, “that said, BTC & ETH do seem high lol.” Musk earlier called Bitcoin a “less dumb” version of cash. The largest cryptocurrency rose as much as 3.4% to a record high of $57,527 on Saturday before paring gains to $57,040 at 1:26pm in New York. It surged 56% since the end of January and more than quadrupled last year. For several years after its debut more than a decade ago, Bitcoin traded for just a few cents.

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