Bruce Whitfield:
Minister, it?s been a rough day — first you got stuck in a lift, now you got stuck in the Cape Town traffic. Thank you very much for joining us this evening on 'The World at Six'. You had R41-billion more than you anticipated you would have, this time last year. That must have made your job a lot easier than it has been in the past.

Trevor Manuel:
Well, the revenue overruns over the past while have made our jobs considerably easier. But it?s not just a function of ?. growth. It?s also because the competencies within the revenue service are improving. So, yes, life has been a lot easier because of it.

Bruce Whitfield:
We saw today the Sasol share price come under quite considerable pressure on the news that government is considering a special windfall tax. There is some uncertainty in the market as to what exactly this might entail. Can you elaborate on it?

Trevor Manuel:
Well, it shouldn?t come as a surprise. In the medium-term budget policy statement in October last year, I indicated that it is under consideration. It still is very much under consideration. We would probably put together a task team and evaluate it. It?s not an unusual step. Many jurisdictions have looked at the issue. We are looking at it in the context of synthetic fuels, without any commitment to what it may entail at this stage.

We have to consider the fact that what our syn-fuel producers have is of course an enormous windfall unrelated to the actual production costs. So we have to consider the fair sharing of the burden with these particular companies in that sector. But it?s early days yet.

Bruce Whitfield:
When you refer to windfall tax, you?re not talking about the taxpayers? money that was used to fund the creation of Sasol. You are rather referring to the benefits that Sasol gets from the higher oil price, which doesn?t actually impact it directly.

The Finance Minister Trevor Manuel, we seem to have lost him. Some of the other key issues that were raised in the Budget today: Transfer duty thresholds were raised to R500 000. There was huge relief in the Budget there, R4.5-billion of relief for taxpayers. Monetary thresholds for capital gains tax and estate duty also increased, and incentives to boost expenditure on research and development, as well as the ad volorum excise duties abolished on certain products. We have lost the Finance Minister, we?re going to try and get back to him in just a moment.

Trevor Manuel is back on the line now. Sorry we lost you, Minister. Picking up from where we left off in terms of corporate taxes, you took the decision not to lower corporate taxes or to cut STC. What was behind that decision?

Trevor Manuel:
Well, I think that we are in a competitive arena now, with corporate rates where they are. I hear everybody saying ?oh they were expecting it because of the contribution?.

The question that must be answered is ?what?s so great ? [line breaks] ?. recognise actually not as a company tax. It?s a tax ? and it?s only levied once surplus revenues are distributed. In fact, optimally, we should be taxing it as a dividend. We aren?t doing so at the moment, but everybody says ?well, we were expecting a corporate rate cut, and I?m never quite sure what range of taxation people would think would change the behaviour and see significant.

Bruce Whitfield:
But you have chosen instead to also to put a lot of money behind small business in South Africa, and that?s got to be very good news for that sector. It is the sector where, internationally, it?s been shown, more jobs are created.

Trevor Manuel:
Clearly that?s very important, we have a series that measures that. It?s important to recognise that everything from the abandonment of the RSV levies through the skills or learnership facility, now introduced, is proving crucial to small business. All of that will send a very positive signal for general exchange controls.

Bruce Whitfield:
You have not scrapped exchange controls, but you?ve alleviated the burden quite considerably as well. There are certainly a lot more offshore allowances, a lot more generous than in the past. Effectively, exchange controls for the ordinary South African don?t actually exist any more.

Trevor Manuel:
They don?t exist any longer, save and except that with collective investment schemes, be they retirement funds, unit trusts and that range of products, we need prudential requirements, and those are still caught under the broad rubric of exchange controls. Even if we lifted exchange control, there still would have to be prudential requirements to ensure that there?s a better match between the currency of investment and the currency where the liability lies.

Bruce Whitfield:
Finally minister, you?ve halved the tax on retirement funds — 18 percent down to nine percent. It?s a move that commentators will applaud. I?m assuming that the goal eventually is too eliminate that tax altogether.

Trevor Manuel:
We won?t make any commitment on that, but what we are doing is working intensively to ensure that there?s a changed environment for retirement provisioning.

We indicated today that we will in the course of the next two weeks release a detailed paper that sets out significant changes that we anticipate in this area, and we will be in close conversation with life offices to ensure that we can do this in a way that is actually quite accommodating of their needs, of the needs of all working South Africans, the need to provide for retirement. And of course for fiscal needs as well.

Bruce Whitfield:
Finance Minister, Trevor Manuel, thank you very much for joining us on the 'World at Six'. We are very grateful to you indeed for making time to speak to us.