Trade’s rough conditions attributed to VAT, monthly fuel hikes

THE week started off with the SA Chamber of Commerce and Industry announcing weak trade conditions in South Africa, which have been attributed to the punitive 15% value added tax (VAT) and fuel hikes last month.

The Trade Activity Index (TAI) of the chamber’s Trade Conditions Survey for April measured 39, down from 43 recorded in March.

The chamber said respondents to the survey pointed to the fuel hikes that affected turnover and put profit margins under pressure.

“The increase of VAT to 15%, the higher fuel levy, strikes, and looting and property damage at certain locations, had a negative effect on trade activity,” it said.

As if to undo the sour mood that followed after the trade conditions statement, Statistics South Africa (Stats SA) released its Quarterly Labour Force Survey, which showed that retail trade sales in the first quarter of 2018 surged by 4.8% to R83.3 billion in March. This was attributed to consumers upping spending before the VAT increase and fuel hikes in April.

Data from Stats SA also showed general dealers, textiles, clothing, footwear and leather goods, pharmaceuticals, food, beverages and tobacco sales contributed to the increase which beat the meridian estimates of a 4.4% increase.

Public Enterprises Minister Pravin Gordhan, whose broom has been sweeping clean troubled state- owned enterprises, announced a new interim board for Transnet.

Popo Molefe from the Passenger Rail Agency of SA, will head the interim board.

Transnet appointed chartered accountant Mohammed Mahomedy as interim chief financial officer. He has been with the company for 12 years, and takes over from Garry Pita, who resigned last month amid a financial scandal involving the controversial Gupta family.

Not to be outdone, the Guptas, accused of grand-scale corruption and state capture, and wanted by the Hawks, also thrust themselves into the spotlight. In an interview with Indian media shown on eNCA from his home town Saharanpur, Ajay Gupta dismissed talk of any criminal allegations against him or his brother Atul “in any part of the world”.

He claimed no authorities had approached him to indicate any charges.

In April, Ajay was reportedly approached by South African businessman Justin van Pletzen outside an office block in Dubai. He asked him when he would be returning to South Africa, where Gupta is wanted by the Hawks, to which he allegedly replied: “They’re not giving a reply. The day they give a reply, I’ll go there.”