I am still trying to cope with one of the shock announcements in Minister Manuel’s budget on Wednesday. Can you believe that certain game rangers have not been collecting VAT from their game viewing clients? In future, for the added value of bouncing on a hot canvas seat, out of earshot of the guide’s mumbled commentary, and ingesting quantities of Bushveld insect life, tourists will now need to open their dusty wallets and extract a further 14% for the taxman. One can only hope that they actually see some buffalo in addition to feeling that they have been charged like a wounded one.
And then of course there’s the matter of amending the manner and amount of tax to be collected from dividends and other similar company distributions. This has deposited not only a cat but the aforementioned buffalo into the pigeons. Especially in respect of the preference share market, where prices took a severe battering after the budget speech. I am not certain that this panic is justified. In my view, companies that pay dividends (on both ordinary and preference shares) will now need to do some thinking about their distribution policies. Shareholders will expect to see some benefit from the 250 bp drop in the applicable tax rate. In addition, preference share issuers’ will want to ensure that these instruments continue to offer sufficiently attractive after-tax rewards that will attract investors. Fortunately, most companies were smart enough, when originating these variable rate preference shares, to recognize that future legislative changes might shift the goal posts and to make provision for such events. I fully expect in due course to see soothing and welcome announcements of the adjustments that will restore the status quo for income-hungry and tax-averse investors.
Naturally, the All Share is setting record highs even as I write this letter. The background noise of the bears whimpering and whining their warnings is getting ever more plaintive and faint. By the time the end arrives, they will have all disappeared and there will be no one around to say: “I told you so.”
Now why does the SA Rugby Union think that it would be a good idea to co-opt two women on to its “previously all-male president’s council”? The Union is delighted that two prominent Joburg female business personalities have consented to join them. This decision is on a par with the idea of getting the two front rows to touch each other before crunching together. Cries of amazement, incredulity, and amusement have greeted the sight of this weird ritual being enacted on the field. One grizzled commentator asked whether anyone at the IRB had ever been a front row forward or whether anyone had bothered to ask one what they thought of the plan. It certainly hasn’t decreased the infringements nor the potential for injury in what is actually already a contact sport without the need for a quick touch before engagement. I can’t imagine what changes the women will want to suggest. Open toed shoes in place of boots? Gloves and hats at all times? Eish.
Methinks the Aussies are playing mind games ahead of the World Cup. Whitewash defeats and key players crocked beyond repair? Oh please. Don’t forget their fine history of adjusting the betting odds. Now will someone please tell our captain not to fall for it and shoot his mouth off at the press conference.
James Greener
23rd February 2007
