The Brenthurst Initiative was a 2003 policy paper on

Black Economic Empowerment Black Economic Empowerment (BEE) is a policy of the South African government which aims to facilitate broader participation in the economy by black people. A form of affirmative action, it is intended especially to redress the inequalities cr ...

South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...

by Jonathan and

Nicky Oppenheimer Nicholas F. Oppenheimer (born 8 June 1945) is a South African billionaire businessman. He was formerly the chairman of De Beers diamond mining company and of its subsidiary, the Diamond Trading Company, and former deputy chairman of Anglo Ame ...

that called for tax incentives to encourage economic growth and black wealth creation.

The proposal

The initial, draft proposal release in August 2003 had the stated objectives of boosting South Africa's

economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...

rate from 2.7 percent to 5 percent annually, developing a system of

tax A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...

incentives and penalties to encourage black ownership of companies and businesses and to raise R224-billion to ensure 26 percent black ownership of all equity on the

JSE Securities Exchange JSE Limited (previously the JSE Securities Exchange and the Johannesburg Stock Exchange) is the largest stock exchange in Africa. It is located in Sandton, Johannesburg, South Africa, after it moved from downtown Johannesburg in 2000. In 2003 ...

by 2014. The tax incentives, on a sliding scale, would be calculated based on a company's rating on a governmental empowerment scorecard and was intended to provide a competitive advantage to racially transformed companies. This was interpreted as a "carrot" to balance the "stick" of legislated transformation requirements and associated penalties.

Reception

The initiative was first released at a function opened by President

Thabo Mbeki Thabo Mvuyelwa Mbeki (; born 18 June 1942) is a South African politician who served as the 2nd democratic president of South Africa from 14 June 1999 to 24 September 2008, when he resigned at the request of his party, the African National Cong ...

and drew praise from

Cyril Ramaphosa Matamela Cyril Ramaphosa (born 17 November 1952) is a South African businessman and politician serving as the 5th and current President of South Africa since 2018. A former Anti-Apartheid Movement, anti-apartheid activist and trade union leade ...

and Moss Ngoasheng and criticism from

Tony Leon Anthony James Leon (born 15 December 1956) is a South African politician who served as leader of the opposition from 1999 to 2007 as leader of the Democratic Alliance (DA). He led the DA from its inception in 2000, until his retirement from ...

and

Mangosuthu Buthelezi Prince Mangosuthu Gatsha Buthelezi (; 27 August 1928 – 9 September 2023) was a South African politician and Zulu people, Zulu prince who served as the traditional prime minister to the Zulu royal family from 1954 until his death in 2023. He ...

. The initial response from some economist and trade unions was described as "downright cool". The initiative was subsequently criticised for being too limited, for potentially reducing the tax base and for effectively proposing that a black majority government fund the transformation of white-owned businesses. The

Helen Suzman Foundation The Helen Suzman Foundation is an independent, non-partisan think tank in South Africa dedicated to promoting liberal democratic values and human rights in post-apartheid South Africa through its research, publications, litigation and submissions ...

called the initiative "both good news and bad news". A 2004 proposal by the

South African Revenue Service The South African Revenue Service (SARS) is the revenue service of the South African government. It administers the country's tax system and customs service, and enforces compliance with related legislation. It is governed by the SARS Act 34 of ...

for tax breaks to companies that give shares to a broad base of employees was considered to be linked to the Brenthurst Initiative. Business Report(1)

Notes

References

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External links

Original Brenthurst Initiative policy paper (PDF)Analysis by the Helen Suzman Foundation
{Dead link, date=August 2018 , bot=InternetArchiveBot , fix-attempted=yes Black economic empowerment