Making empowerment criteria mandatory for residential complexes – recently mooted by Minister for Human Settlements Mmamoloko Kubayi – would be another effective tax, the equivalent of demanding that households commit an additional portion of their after-tax incomes to supporting a government policy, says the Institute of Race Relations (IRR).
In widely reported comments earlier this month at the Community Schemes Ombud Service Indaba, Kubayi referred to the extensive spend on services across South Africa’s 70 000 community schemes, adding: ‘We need to put measures in place to ensure that a procurement approach that gives opportunities to emerging black SMMEs becomes mandatory.’
The IRR says in a statement: ‘This is an extraordinary suggestion. Community Schemes represent the home investments of innumerable South African households. For most, this will be the largest outlay they ever make; for many, costs associated with housing are the single largest monthly expense.
‘This is a significant matter for the country’s hard-pressed middle class. Not only has the country seen a marked escalation in the cost of living, but state failure has forced those who can afford it into a regime of effective double taxation as they buy privately what the public administration is not providing. This is part of the reason for the growth of community schemes in the first place.’
Making empowerment criteria mandatory ‘would be another effective tax’, the IRR says. ‘Think of this as imposing a triple tax obligation.
The IRR points out that BEE ‘is not a mandatory obligation for either the public or the private sector’, and that it ‘is surprising that Kubayi proposes imposing it on ordinary households’.