JOHANNESBURG - The South African Institute of Chartered Accountants (Saica) said yesterday the rolling power cuts implemented by power utility Eskom this year could have cost the fiscus as much as R11billion in lost revenue.
The accounting body based its assumption on the fact that load shedding potentially cost the South African economy R38bn by March 20.
Madelein Grobler, Saica project director for tax, said the R11bn did not take into account the R5bn spent by Eskom on diesel in the past three to five months due to unavailable plants and the shortage of coal supply.
“If we take the current estimated tax-to-gross domestic product ratio of 28.8 percent per the 2019 National Budget Review into account, Sars (SA Revenue Service) may have lost almost R11bn in revenue collections since January 2019,” said Grobler.
“Interestingly enough, Sars announced on April 1, 2019 that the preliminary outcome for the financial year ending March 31, 2019 fell short by R14.6bn.
"This raises the question of whether the R11bn could possibly be contributed to the current deficit or impact National Treasury’s Budget in future.”
Sars said last week that company income tax (CIT) collections contracted by 2.5percent due to a significant number of CIT refunds, which were paid to the large business segment and the “continuing power cuts imposed by the utility company” that affected companies’ profitability.
Eskom implemented rotational stage four load shedding in February and March due to a shortage of good-quality coal, diesel shortages, low storage dam levels, poor maintenance and breakdowns of power stations.
Cyclone Idai in neighbouring Mozambique also put further strain on the electricity provider’s capacity due to a collapse in imported supply from the hydroelectricity facility at Cahora Bassa.
The cash-strapped power utility last week announced its winter plan for South Africa to ensure optimal supply for the next five months.
The plan included a maximum of 26 days of blackouts limited to stage one.
Sam Duby, Africa director for TFE Energy, said mini-grids could very quickly sort out a lot of the biggest challenges that South Africa is having with its energy supply at the moment.
“Deregulation would open a market for people to produce power and sell power and that would revolutionise the energy landscape in South Africa.
"Technically it wouldn't be a difficult or complex thing to do; there are plenty of precedents around the world where it has worked,” Duby said.