Farmers in some parts of the country are dancing in the rain if not crying tears of joy as heavy downpours continue. This may not be the case with Eskom and some municipalities, which are counting the costs of damage caused by the rain.
In December, it was reported that South Africa had available white maize stock to cover only 23 days of demand at the end of November – down from 37 days at the end of June – because of dry weather conditions.
However, two days ago Kosie Van Zyl, an advisor at Agri SA, said there was more joy than tears in the farming sector. Van Zyl said farmers were already claiming to have bumper crops.
Dry weather conditions in the North West and Free State caused a panic early this year, resulting in millers stocking up at higher prices.
Absa Weekly Trends analysis for last month said that because of the relief from rain, white and yellow maize prices were expected to move downwards and then back to their normal levels despite tight supplies in the market. This suggested that food prices, including staples such as maize meal and to some extent poultry products, would ease up.
But too much of a good thing can become bad.
Farmers in the Cape Winelands, Central Karoo, Eden and Overberg are counting costs estimated at R1.2 billion as a result of heavy rain experienced in early January. As rain continues to pour, the National Assembly’s agriculture, forestry and fisheries committee called on government assistance to provide flood-stricken communities with relief. page 18
Tax avoidance
Last month a Naspers-linked business, in an act of frustration, publicly fingered Google for dodging taxes in South Africa and accused it of transacting through an offshore entity without having to declare profit or revenue.
At the time, it seemed that 24.com had suffered a bout of the green-eyed monster, but a Bloomberg review yesterday shamed several large US corporations whose tax evading schemes display the deftness of cybercrime thrillers.
Multinational companies have accumulated $1.95 trillion (R21.01 trillion) outside of the US, sidestepping tax sinkholes thanks to loopholes in the tax code.
Technology companies have moved patents to low tax regions. Apple, Microsoft and IBM have been scrutinised by US authorities. In three years, Microsoft’s profits overseas have more than doubled and Google’s have too. Apple’s earnings have more than quadrupled.
Google South Africa said last month that its advertisers were responsible for VAT reports and remittance under tax rules, but this was set to change from next month when the state would require those who provided digital goods and services to register as VAT vendors.
Geoff Cohen, the chief executive of 24.com, said companies that were not registered locally did not have to pay local income or purchase taxes, meaning that the state’s hands were tied.
Meanwhile, the US Congress remains paralysed in its efforts to curb the migration of profits to tax havens such as Luxembourg and Bermuda, according to Bloomberg.
Edited by Peter DeIonno. With contributions from Nompumelelo Magwaza and Asha Speckman.