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Business Chamber statement: Local Business Tax

The Nelson Mandela Bay Business Chamber has reviewed the Nelson Mandela Bay Municipality’s application for a Local Business Tax to fund economic infrastructure and services, as presented on 21 November 2011.

The Business Chamber rejects the proposed Local Business Tax, believing that the argument in its favour is flawed.

In a letter presented to Chief Financial Officer Kevin Jacoby today, the Nelson Mandela Bay Business Chamber outlines its opposition to the tax, citing a need for the municipality to pursue internal efficiencies and performance management, and eliminate waste and corruption, before adding to the tax burden of a business community already under severe pressure from increasing utility and wage costs as well as the current tough economic climate. The Business Chamber’s 800 plus members are overwhelmingly opposed to the implementation of such a tax until the Metro can demonstrate that effective steps have been taken to improve efficiency and effectiveness, and to strengthen local government accountability for economic infrastructure and services. In some cases, the LBT levied on companies will be double that of the previous RSC levies. Adding another layer of cost further deteriorates our global competitiveness, with the increased costs being passed onto consumers.

As operating costs increase and profitability decreases, there is a very real threat of these local operations being shut down. The costs of labour, fuel and utilities are increasing at unsustainable levels, exacerbated by the productivity of local industry running below international levels. Business would prefer to see funds being allocated towards incentives to attract investors, and industrial development to enhance the tax base and ensure sustainability, prosperity, business growth, job creation. This should be achieved through the industrial development strategy which should address the need for infrastructure and incentives to support investment and job creation.

In conclusion, the Business Chamber would like to see the municipality welcoming business and making it attractive for investors to do business in Nelson Mandela Bay

ENDS.

Issued by: Nicole Klokow, Communication Specialist
media@nmbbusinesschamber.co.za / 041 373 1122

Contact: Samantha Venter, Operations Director
manager@nmbbusinesschamber.co.za / 041 373 1122

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