R100m injected into Bay fight against Covid-19
● Kieswetter flags tax bloodbath as shutdown bludgeons economy
A total of R100m in funding to fight Covid-19 has been pulled together thanks to big business in Nelson Mandela Bay.
An ebullient Eastern Cape premier Oscar Mabuyane announced the multimillion-rand deal — between VWSA, the Eastern Cape department of health, the German government, the Nelson Mandela Bay municipality and the Nelson Mandela Bay Business Chamber — during a trip to the Bay yesterday.
Mabuyane — who said collaborative efforts were the only way to fight the coronavirus pandemic — was speaking at the launch of a temporary medical facility being set up at an unused VWSA plant in the Neave industrial area in Port Elizabeth.
While praising the initiatives of the private sector to fight the pandemic, Mabuyane made no bones about the fact that the Bay’s regional office had been lacking in leadership.
“We’re coming from a background where a lot of negative things were said about how things are handled on this side of the province,” he said.
“The presence of our DDG [deputy director-general of health Dr Litha Matiwane] is yielding positive dividends.
“The leadership that has been missing administratively, that was one of our challenges.
“I’ve seen progress and they’ve presented a health turnaround strategy which is quite clear in navigating the challenges we have.
“What we need is firm and effective leadership.
“We must be efficient, we’re working against this with [minimal] resources, which is the reason why business is on board.
“We must be meticulous at all material times and ensure we avoid wastage and fruitless expenditure.”
Matiwane was deployed to the Bay about two weeks ago by health minister Zweli Mkhize to ramp up the metro’s tracing, screening and testing for Covid-19.
This after Mkhize, on April 22, read the riot act to health MEC Sindiswa Gomba and her administrative staff in a meeting behind closed doors in Port Elizabeth.
Mkhize, at the time, said the deployment of Matiwane was necessary as the province’s figures simply did not add up.
Launching the new temporary health facility, Mabuyane said the facility would be used as an overflow medical facility and once fully operational, would accommodate up to 4,000 beds for patients diagnosed with the virus.
VWSA chair and managing director Thomas Schaefer said patients would include highacuity patients who required oxygenation.
“The number of people testing positive for the Covid-19 virus continues to rise daily, especially here in the Eastern Cape and specifically in the metro,” he said.
“This is worrying, especially since we [have moved] from level 5 to level 4 lockdown this week.
“It requires us to act swiftly and decisively and to collaborate between business, government and the community.”
Schaefer said VWSA had been working with other local businesses under the leadership of the Nelson Mandela Bay Business Chamber to in
Sars is projecting an annual revenue loss of about R285bn based on figures for the first month of the lockdown and the effect of sluggish economic activity, commissioner Edward Kieswetter said yesterday.
Kieswetter presented the tax authority’s strategic and performance plans to parliament’s two finance committees and gave a breakdown of the devastating effect of the Covid19 lockdown and the slowdown in economic activity on tax revenue.
PAYE was down last month by 5.2% compared to the same month last year, with more than 65,000 employers who made payments last year making none this year, to a tax value of R3.8bn.
More than 87,000 employers who made payments last year made payments that were lower, to a tax value of R6.1bn.
In terms of domestic VAT, there was a month-on-month decline compared to last year of 4.3%; and a 13% decrease from about 160,000 vendors last year to 139,000 this year.
Of the 139,000 vendors, only 105,000 paid an amount equivalent to last year .
A total of 75% of the vendors contracted in terms of their contribution, “which obviously shows a significant strain in terms of the consumption patterns in the economy”, Kieswetter said.
There was a decline of 19.7% in import taxes, with import VAT down 25%, at a tax value of R1.6bn; and customs duty down by 11.8%, with a tax value of R100m.
Compared to the same month last year there was a decrease of 54.7% in excise duty, at a tax value of R1.3bn, with the decline of R1.7bn on alcohol and cigarettes being offset by a R400m upward correction on the fuel levy.
On corporate taxes, there was a 55% decline last month compared to last year.
VAT refunds were 12.5% lower than the estimate, primarily due to the number of credit returns submitted by taxpayers.
Kieswetter expressed concern about the significant reduction in economic activity that will not only have shortterm implications for tax revenue but, in the longer term, result in the permanent loss of economic capacity.
This because some of the businesses that go under will never operate again, resulting in a permanent loss of jobs.
He said it probably took about 100 entrepreneurs to create one successful business.
A further big concern was the increase in illicit and criminal activities that were thriving under the lockdown, he said.
Kieswetter also estimated that the tax revenue loss from the tax-relief measures announced by the National Treasury was likely to be higher than the initially estimated R70bn.
This was because of the higher-than-anticipated applications for payment deferrals, which are likely to be significantly higher than the estimated R5bn.