{"id":97852,"date":"2026-04-28T13:19:17","date_gmt":"2026-04-28T13:19:17","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements"},"modified":"2026-04-28T13:34:18","modified_gmt":"2026-04-28T13:34:18","slug":"south-africans-face-higher-taxes-for-new-bee-requirements","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements","title":{"rendered":"South Africans Face Higher Taxes for New BEE Requirements"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>The National Treasury\u2019s newly proposed procurement regulations will result in narrowing the pool of potential suppliers to the government, removing competition and increasing prices.<\/p>\n

These regulations, called the General Public Procurement Regulations, have been published for public comment and will lead to drastic changes to the Black Economic Empowerment (BEE) framework in South Africa.<\/p>\n

The new regulations will force companies that wish to do business with the government to have a larger percentage of their procurement from majority black-owned businesses.<\/p>\n

In particular, companies must show that at least 40% of their prior procurement was spent with businesses that are at least 51% owned and managed by black persons.<\/p>\n

While the ANC see this as a vital step towards enhancing BEE and transformation, the DA\u2019s Mark Burke says it is likely to result in the state paying a premium for services.<\/p>\n

This means taxpayers will have to foot a larger bill for the government to perform its basic functions, as those increased costs will require more revenue to be squeezed from a stagnant economy.<\/p>\n

This is on top of the existing cost of BEE in South Africa, with research from the Free Market Foundation showing that it already costs the economy R290 billion in direct compliance costs and lost economic activity.<\/p>\n

The state bears a significant portion of this cost in the form of inflated prices on goods and services as companies pass on the cost of compliance to the final buyer.<\/p>\n

Burke explained to BizNews that the new regulations will only exaggerate this, as they will further reduce the pool of suppliers \u2013 enabling them to charge a larger premium for enhanced BEE compliance.<\/p>\n

\u201cThis is completely unnecessary and is the complete opposite of what the country needs. It can only be described as idiocy to try to continue implementing these regulations,\u201d Burke said.<\/p>\n

The new regulations will tighten up how BEE is enforced within the state\u2019s own procurement network, as laid out by the Public Procurement Act in 2004.<\/p>\n

\u201cIn practice, this means that whenever somebody does business with the state, they need to conform to a certain type of ownership and management structure,\u201d Burke said.<\/p>\n

Burke explained that it is not unreasonable for the government to have some demands on private companies for the privilege of doing business with the state.<\/p>\n

However, these demands usually relate to ensuring the state gets cut-throat prices and maximises value. This is not the case in South Africa.<\/p>\n

Government willingly pays a premium<\/b><\/p>\n

DA MP Mark Burke<\/p>\n

In South Africa, the government willingly pays a premium for the products and services it procures, rather than pushing for the highest quality at the lowest price.<\/p>\n

This is the opposite of how things should be, with the government paying more than it should, with the cost ultimately passed on to taxpayers who fund the state.<\/p>\n

\u201cYou go from asking for a discount to being willing to overpay because you have these silly requirements about ownership and management,\u201d Burke said.<\/p>\n

\u201cThe government knows it will pay a premium as long as the business owner looks a certain way on the surface.\u201d<\/p>\n

Burke described this as a doubling down on poor policy that is already destroying value for South Africans and putting the state under increased financial pressure.<\/p>\n

In effect, the National Treasury is asking taxpayers to put more money into a system that is producing poor outcomes. It is throwing good money after bad on a large scale.<\/p>\n

Burke explained how this will happen in practice, with the regulations steadily decreasing the number of businesses that can supply the state.<\/p>\n

\u201cYou are now narrowing down suppliers to a very small subset of South African companies that conform to these requirements,\u201d Burke said.<\/p>\n

\u201cBy implication, if you can only procure from a small portion of the whole pie of available options, you will overpay for goods and services.\u201d<\/p>\n

Burke likened it to attending a rugby match where there is only one stall selling hot dogs. That store owner will be able to charge more money for a hot dog, and consumers will pay more than the normal price.<\/p>\n

\u201cWhen there is competition, there is competition on quality, and there is competition on price. This is a mechanism to strip out competition as far as possible,\u201d Burke said.<\/p>\n

\u201cGovernment will claim this is about getting businesses to think about their ownership structures. These are just window-dressing measures that make businesses less efficient.\u201d<\/p>\n

Businesses will have to spend money and resources to comply with these regulations, raising their cost base, making them less competitive, and eroding their value proposition.<\/p>\n

\u201cYou have taken businesses that are operating in a difficult environment in South Africa and are adding another layer of difficulty by forcing companies to add people to their board or shareholders for the privilege of doing business with the state,\u201d Burke said.<\/p>\n

\u201cThis is all because the government says those people should be there. It takes it from a tough environment to operating in a tough environment with your hands tied behind your back.\u201d<\/p>\n

\u201cIt will make things more expensive for the state to procure and make things less efficient, while potentially making corruption worse.\u201d<\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. The National Treasury\u2019s newly proposed procurement regulations will result in narrowing the pool of potential suppliers to the government, removing competition and increasing prices. These regulations, called the General Public Procurement Regulations, have been published for public comment and will lead to drastic changes to the Black Economic Empowerment (BEE) framework in […]<\/p>\n","protected":false},"author":84,"featured_media":97850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3,5,7,12],"tags":[275],"class_list":["post-97852","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-community","category-economy","category-head-lines","category-policy","tag-south-africa-2"],"yoast_head":"\nSouth Africans Face Higher Taxes for New BEE Requirements - South Africa<\/title>\n<meta name=\"description\" content=\"The National Treasury\u2019s newly proposed procurement regulations will result in narrowing the pool of potential suppliers ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africans Face Higher Taxes for New BEE Requirements\" \/>\n<meta property=\"og:description\" content=\"The National Treasury\u2019s newly proposed procurement regulations will result in narrowing the pool of potential suppliers ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2026-04-28T13:19:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-04-28T13:34:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2026\/04\/sm_1777370628.730954.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africans Face Higher Taxes for New BEE Requirements\",\"datePublished\":\"2026-04-28T13:19:17+00:00\",\"dateModified\":\"2026-04-28T13:34:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\"},\"wordCount\":877,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2026\/04\/sm_1777370628.730954.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"community\",\"economy\",\"head lines\",\"policy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-face-higher-taxes-for-new-bee-requirements\",\"name\":\"South Africans Face Higher Taxes for New BEE Requirements - 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