Chairperson, the primary objective of the Diamond Export Levy Bill is to provide for the imposition of an export levy on rough diamonds and to allow for offsets, or credits, against the levy. The Bill aims to replace the 15% with a reduced 5% levy on diamonds exclusively purchased and exported through the Diamond Exchange and Export Centre. It further aims to disallow local diamond houses and traders as sites for export sales.
Some proposed relief measures include credits on imported unpolished diamonds; temporarily export on expo and display purposes; a 5% window in respect of the threshold requirements. Levels of exemption to local large, medium and small producers will still be applicable, subject to different turnover and threshold requirements for local sales and the DEEC tendering process, where the Minister may waive some of these requirements for large producers.
The secondary objective is to promote local beneficiation of the polishing and cutting of rough diamonds. This will be based on: Producers will be obliged to sell a portion of their production to the state diamond trader, who in turn will resell this to local cutters and polishers. Diamonds for export from the state diamond trader will not be exempt from the 5% levy. Exemption will be applicable to the extent that local cutters and polishers receive a sufficient and sustainable supply of unpolished diamonds.
The objective of the Diamond Export Levy Administration Bill is to provide for the administration matters relating to the imposition of the requirements of the Diamond Export Levy Bill.
The most critical implications of this Bill, among others, is the fact that all legal persons must be registered with SARS if they want to acquire an export permit and the fact that the term ``producer'' will be extended beyond the holder of the mining rights to other companies within the same group.
Voorsitter, daar is egter sekere bekommernisse ook gedentifiseer: Om kompeterend op die uitvoermarkte te wees, het produsente die vrystelling van hierdie heffings nodig. Dis 'n kompeterende wreld daar buite. Hulle is verplig om hul diamante by die DEEC aan te bied hoewel daar geen beheer is oor wie hierdie kopers is nie. Krediete teen die heffings kan verdien word slegs as hulle diamante aan plaaslike bevoordeeldes verkoop word, terwyl slegs die onverkoopte gedeelte dan uitgevoer kan word.
Ongelukkig is daar tans geen bewyse beskikbaar om die lewensvatbare en volhoubare kapasiteit te bevestig en om te sien dat die bedryf wel sal groei en ontwikkel nie.
Die toename in die regulasies vanuit hierdie wetsontwerp mag die nadeel inhou dat dit verdere vastekapitaalinvestering in die diamantmyn- en die slyp- en poleerbedrywe kan ontmoedig.
Groot mynhuise kan selfs oorweeg om hulle basisse na ander lande met meer stimulerende vereistes, te verskuif. Sulke optrede sal ons diamante se kompeterende voordeel op die wreldmarkte verswak, met moontlike werksverliese, wat natuurlik strydig is met die bedoeling van plaaslike bevoordeling van slypers en poleerders.
Hierdie wetsontwerp gee ook aan die Minister van Finansies die magte om invoerkrediete aan te pas as 'n inkomstemeganisme.
N 'n deeglike evaluering van die inhoud van hierdie wetsontwerp, wat noodwendig saamgelees moet word met ander diamantverwante wetgewings, is dit geensins duidelik dat dit in werklikheid tot voordeel van beide die diamantmyn- asook die diamantslyp- en -poleerbedryf sal strek nie.
Die DA sal daarom nie hierdie wetgewing in sy huidige formaat steun nie. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[Certain points of concern, however, were also identified. In order to be competitive on the export markets, producers need exemption from these levies. It is a competitive world out there. They are obliged to offer their diamonds at the DEEC, although there is no control over who these buyers are. Credits against the levies can only be earned if they sell their diamonds to local beneficiaries, and only the unsold portion can then be exported.
Unfortunately there is no evidence available at present to confirm the viable and sustainable capacity and to provide assurance that the industry will indeed grow and develop.
The increase of regulations resulting from this Bill might have the disadvantage of discouraging further fixed capital investment in the diamond mine and cutting and polishing industries.
Large mining houses might even consider moving their bases to other countries with more stimulating demands. Such action will weaken the competitive advantages of our diamonds on the world markets, with possible job losses, which, of course, is contrary to the objective of benefiting local cutters and polishers.
This Bill also confers on the Minister of Finance the powers to adjust import credits as an income mechanism.
After thorough evaluation of the contents of this Bill, that needs to be read together with other diamond related legislation, it is not at all clear that it will, in fact, be to the advantage of the diamond mining and diamond cutting and polishing industries. For this reason the DA will not be supporting the legislation in its present format.
Thank you.]