1. The South African tax and spending system Road Freight Association Presenter: Cecil Morden | Economic Tax Analysis, Tax Policy | June 2014

2. Overview Introduction Real Gross Domestic Product How South Africans spend their money Main budget balance Tax principles, South Africans tax system & tax reforms Tax revenue trends in South Africa Main tax instruments Tax and fiscal incidence Additional slides 2

3. Introduction Population of 51.8 million ± 15.0 million working (formal & informal); ± 5.0 million unemployed; unemployment (narrow) = ± 25.0% Gini coefficient (2006): –Pre- grants, subsidies & taxes (income only) = 0.69 –Post- grants & subsidies = 0.52 –Post- grants, subsidies & taxes = 0.47 3 “South Africa confronts severe inequality and high unemployment…” Budget Review, 2012 AgeNumber% 0 to 14 15 100 08929.2% 15 to 64 33 904 48065.5% 65+ 2 765 9915.3% Total 51 770 560100.0%

4. Real GDP growth (%) – annual average 4

5. Real GDP growth (%) annual 5

6. Real GDP per capita (@ 2005 prices) 6

7. How South African households spend their money: % by main expenditure group 7 2. Expenditure Table 2.40 (%) - Average household consumption expenditure by main expenditure group and expenditure deciles Expenditure deciles Total Lower23456789Upper Main expenditure group households annual Food and non-alcoholic beverages35.0%35.2%33.9%32.1%29.3%26.0%21.3%15.3%10.3%5.6%12.8% Alcoholic beverages and tobacco3.3%2.8%2.4%1.7%2.0%1.7%1.9%1.3%1.1%0.6%1.1% Clothing and footwear7.8%8.6% 8.5%8.1%7.8%7.4%5.6%4.2%2.6%4.5% Housing, water, electricity, gas and other fuels 26.0%22.5%22.3%22.1%23.2%25.4%27.2%32.4%33.5%35.2%32.0% Furnishings, household equipment and routine maintenance of the dwelling 4.5%5.3%5.8%5.9%5.7% 5.6%4.7% 5.1% Health1.7%1.6%1.5%1.4%1.3% 1.4%1.3%1.5%1.4% Transport7.0%8.6%9.4%11.0%12.2%12.5%14.6%14.7%15.1%21.1%17.1% Communication3.9%3.6%3.5%3.4%3.1%3.2%3.1%3.0%3.1%2.5%2.8% Recreation and culture1.2%1.5%1.8% 2.1%2.2%2.3%2.8%3.5% 3.0% Education0.4% 0.5%0.8%1.0%1.9%2.0%2.5%3.3%3.2%2.7% Restaurants and hotels2.3%2.1%2.0%2.4%2.7%2.4% 2.3%2.7%2.4% Miscellaneous goods and services6.8%7.7%8.2%8.7%9.1%9.9%10.6%13.8%17.0%16.8%14.7% Other unclassified expenses0.1% 0.2%0.1% 0.2%0.1% Total 100% Source: Statistics South Africa, Income and Expenditure Survey, 2010/11

8. How South African households spend their money: Cumulative % across income deciles 8 Table 2.40 (%) - TOTAL household consumption expenditure by main expenditure group and expenditure deciles R' 000 - TOTAL Expenditure deciles Total Lower23456789 Upper only Main expenditure groupTOTAL- Cumulative % Food and non-alcoholic beverages2.7%7.5%13.7%21.3%30.2%40.5%52.1%64.9%79.6%20.4%100% Alcoholic beverages and tobacco3.0%7.5%12.6%17.4%24.3%32.2%44.5%57.2%75.7%24.3%100% Clothing and footwear1.7%5.0%9.5%15.2%22.3%31.1%42.6%56.0%73.0%27.0%100% Housing, water, electricity, gas and other fuels 0.8%2.0%3.7%5.7%8.6%12.6%18.5%29.3%48.6%51.4%100% Furnishings, household equipment and routine maintenance of the dwelling 0.9%2.7%5.3%8.8%13.1%18.8%26.4%36.3%53.2%46.8%100% Health1.2%3.1%5.5%8.6%12.2%16.8%23.6%33.6%52.6%47.4%100% Transport0.4%1.3%2.6%4.5%7.3%11.0%16.9%26.1%42.3%57.7%100% Communication1.4%3.6%6.4%10.1%14.4%20.1%27.8%39.3%59.3%40.7%100% Recreation and culture0.4%1.3%2.7%4.5%7.2%10.8%16.0%25.8%46.7%53.3%100% Education0.2%0.4%0.9%1.8%3.3%6.9%12.0%22.1%44.8%55.2%100% Restaurants and hotels0.9%2.4%4.4%7.4%11.7%16.7%23.7%33.7%54.0%46.0%100% Miscellaneous goods and services0.5%1.4%2.7%4.5%6.9%10.3%15.3%25.4%46.6%53.4%100% Other unclassified expenses0.7%2.0%4.3%6.5%11.1%15.8%22.3%32.8%48.8%51.2%100% Total: Cumulative %1.0%2.7%5.1%8.1%12.0%17.1%24.1%34.8%53.2%46.8%100% Source: Statistics South Africa, Income and Expenditure Survey, 2010/11

9. Main Budget: Income & Expenditure as a % of GDP 9

10. Main budget deficit / surplus & debt-service costs as a % of GDP 10

11. Main budget: expenditure, revenue, deficit & surplus 11

12. Consolidated fiscal framework – Budget 2014 12  Revenue stabilises at around 29 per cent of GDP over the medium term  Non-interest expenditure declines from 30.2 per cent of GDP in 2013/14 to 28.8 per cent of GDP in 2016/17  As economic growth improves and spending limits stay in place, the budget deficit is projected to narrow to 2.8 per cent of GDP by 2016/17 Source: National Treasury

13. Expenditure - Budget 2014 13 Real main budget non-interest expenditure growth, 2003/04 – 2016/17 Source: National Treasury

14. Consolidated expenditure – 2012/13 14 2012/13 Rand million% Main budget 965 495.6 92.4% Social security funds 25 870.5 2.5% Public entities 43 435.5 4.2% Provinces 6 710.2 0.6% RDP Fund 3 699.9 0.4% Consolidated government expenditure 1 045 212100% Consolidated Government Expenditure: Functional Classification 2012/13 Rand million% General Public Services 158 927.315% 3 Defence 37 851.04% 8 Public Order of Duty 99 905.910% 7 Economic Services & Infra..: Transport, Energy, etc.. 124 633.912% 5 Environmental Protection 7 127.81% 10 Housing and Community Amenities 117 227.411% 6 Health 127 890.012% 4 Recreation and Culture 7 720.01% 9 Education 212 316.520% 1 Social Protection 151 612.015% 2 Total Consolidated Expenditure 1 045 212100% Consolidated Government Expenditure: Economic Classification 2012/13 Rand million% Current Payments 636 382.261% of which : Compensation of employees 374 977.2 36% : Goods & services 167 938.2 16% : Interest and rent on land 93 466.9 9% Transfers and subsidies : to Households, Provinces, Municipalities, Public Entities, NGOs, etc. 336 747.832% Payments for Capital Assets: Buildings, Machinery & equipment, etc. 67 141.56% Payments for Financial Assets 4 940.10.5% Total Consolidated Expenditure 1 045 212100%

15. Consolidated expenditure: 2007/08 to 2012/13 15 Consolidated Government Expenditure: Functional Classification 2007/082008/092009/102010/112011/122012/13Rank 12/13 vs. 07/08 General Public Services 14.9%14.1%13.1%14.2%14.7%15.1%30.2% Defence 4.9%4.5%4.4%3.6%3.7%3.8%8-1.1% Public Order of Duty 10.2%9.9%9.6%10.1%9.9%10.0%7-0.2% Economic Affairs 12.9%14.2%15.8%12.9%11.1%10.5%5-2.4% Environmental Protection 0.5% 0.4% 0.5%100.0% Housing and Community Amenities 8.3%8.4%8.8%9.7%10.1%10.3%62.1% Health 11.0% 11.6%12.1%12.5%12.7%41.7% Recreation and Culture 1.5%1.4%1.0%0.8% 0.7%9-0.8% Education 19.6%20.0%19.6%20.5%21.4%21.1%11.5% Social Protection 16.3%15.8%15.6% 15.2% 2-1.1% Total Consolidated Expenditure 100% Consolidated Government Expenditure: Economic Classification 2007/082008/092009/102010/112011/122012/13 Current Payments 59%58%57%59%61% of which : Compensation of employees 33.0%32.7%33.1%35.2%36.3%35.9% : Goods & services 17% 16% : Interest and rent on land 10%8% 9% Transfers and subsidies : to Households, Provinces, Municipalities, Public Entities, NGOs, etc. 35%34%32% Payments for Capital Assets: Buildings, Machinery & equipment, etc. 6%7% 6%7%6% Payments for Financial Assets 0%2%4%3%0% Total Consolidated Expenditure 100%

16. Allocations - Department of Transport 16

17. Government is tasked with provision of public goods, infrastructure and services to the benefit of all citizens Public delivery of goods, infrastructure and services require a shift of resources from the private economy to the public system Good fiscal policy rests on three pillars: –Sufficient revenue to cover public expenses [tax policy]; –An optimal allocation of scarce public funds to carry out government’s commitments [expenditure policy]; –Prudent management of fiscal shortfalls [public debt management]. “To tax and please is not given to me, but to tax and be fair is ”. -Nani A. Palkhivala Why taxes ? 17

18. Taxpayers expectations ? a social contract “If people want more public services and trust that their government will try to deliver such services as effectively and efficiently as possible, they are more likely to support efforts to raise taxes than they are when experience has taught them to expect little in the way of benefits from increased government activity (as has happened in too many countries). This view implies that taxes imposed without adequately representing the interests of the people being taxed are unlikely to be collected easily (and will not be productively spent)”. -Richard Bird, “Taxation and Development”, Economic Premise Nr. 34, The World Bank (October 2010) 18

19. The main principles of a good tax Efficiency: The tax system must produce sufficient income for the state, with minimum distortions to the economy. Equity: All residents must contribute to the fiscus in proportion to their ability to do so. Both horizontal and vertical equity are important. Simplicity: As far as possible, taxes should be simple to understand and should be collected in a timely and convenient manner. Transparency & certainty: The manner in which taxes are collected and the calculation of tax liabilities should be certain. Tax rules and procedures should be transparent. Tax buoyancy: The tax system should raise sufficient revenue during all phases of the business cycle, while it lends support to a counter-cyclical fiscal framework. 19

20. 20 Promote economic growth (US – report on taxation, 2005/06) Reducing the likelihood that households or businesses will alter economic behaviour because of special benefits Promoting savings throughout the economy, especially at household level Equalizing the tax treatment of several forms of corporate financing, raising the incentives for companies to issue equity rather than debt to finance growth Reducing the compliance burden for small businesses. Providing them with an immediate write-off for all purchases of new tools and equipment Reducing the double-tax on corporate profits Updating our international tax system

21. Consider the tax (& spending) system as a whole – Mirrlees Review, 2011 Consider the system as a whole: – A good tax system should be structured to meet overall spending needs and the earmarking of revenues for particular purposes should be avoided. – Not all taxes need to address all objectives. – Not all taxes need to be progressive as long as the overall system is. – Generally, the right tools for achieving distributional objectives are direct personal taxes and benefits / spending. – PIT can be designed to achieve the desired degree of progressivity; other aspects of the tax system can be focused on achieving efficiency. (Source: Institute for Fiscal Studies (IFS), 2011. Mirrlees Review: Reforming the tax system for the 21 st century, Tax by Design) 21

22. Tax reforms & tax revenue since 1994 (1) From 1994 to 1999, revenue growth was largely supported by personal income tax, which constituted 41 per cent of total tax revenue by 1999/00. Corporate income tax revenue grew strongly between 2000/01 and 2008/09 in line with robust economic growth, the commodity boom and improved compliance. Government introduced efforts to expand the tax base – known as base broadening – including capital gains tax and measures to limit tax avoidance, reinforced by South African Revenue Service (SARS) administrative reforms to improve compliance. These measures allowed for a reduction in the headline corporate income tax rate from 40 to 28 per cent. The secondary tax on companies was replaced with a 15% tax on dividends. 22

23. Tax reforms & tax revenue since 1994 (2) Measures were introduced to enhance the competitive position of businesses and the economy, including incentives to support industrial policy, skills development, urban development zones, and research and development. The top marginal personal income tax rate was reduced from 45 to 40 per cent, and personal income tax brackets and thresholds were increased to provide relief from inflation. The fairness of the tax system is undermined if individuals and businesses are able to structure their affairs to avoid paying income tax or artificially (yet legally) reduce their income tax payments – amendments to tax legislation over time have sought to curtail these loopholes. The tax system plays an important role in addressing market failures, as governments around the world look for a more effective combination of interventions (both regulations and taxes) to deal with challenges related to solid waste, water pollution, local air pollution, climate change, etc. 23

24. 24 Key Tax Instruments in SA: National Direct Taxes –Personal Income Tax / Individuals –Corporate Income Tax –Dividend withholding tax (Previously Secondary Tax on Companies) –Estate Duty –Donations Tax –Payroll Taxes Skills Development Levy Unemployment Insurance Fund Indirect Taxes –Value Added Tax (VAT) –Excise Duties (Specific and Ad Valorem) –Custom Duties –Transfer Duties (Properties) –Security Transfer Tax (Financial transactions - shares) –Environmentally-related taxes Fuel Levy Electricity levy – non- renewable generation Air Passenger Departure Tax Plastic Bag Levy Tax on incandescent light bulbs CO 2 Motor vehicle CO 2 emissions tax

25. 25 Other revenue instruments in SA Other: non-tax revenue –Mineral & Petroleum Royalties Provincial Government –Gambling Taxes –Motor Vehicle Licence Fees Local Government –Property rates –Surplus from Electricity sales by Municipalities

26. Main tax revenue instruments 26 Tax revenue by instrument as a % of National Budget Revenue 1993/941999/002006/072007/082008/092009/102010/112011/122012/13 Individuals39.1%43.3%29.2%30.1%32.0%35.4%33.9%33.8%35.0% VAT26.3%24.4%27.9%26.9%25.3%25.5%27.4%25.8%27.4% Companies11.9%10.6%24.7%25.0%27.2%23.3%19.8%20.5%20.3% Fuel levy8.1%7.2%4.5%4.2%4.1%5.0%5.1%4.9%5.1% Specific excise4.8%4.5%3.4%3.3% 3.7%3.4% 3.6% Customs duties3.5%3.3%4.9%4.7%3.7%3.4%4.0%4.6%4.9% STC / Dividends0.9%1.6%3.2%3.7%3.3%2.7%2.6%3.0%2.5% Sub Total94.6%94.9%97.9% 98.9% 96.3%96.1%98.9% Three (PIT, VAT, CIT)77.2%78.3%81.9%82.0%84.6%84.2%81.1%80.1%82.8%

27. Tax / GDP ratio 27

28. PIT, VAT (prior to 1991 /92 GST) & CIT as a % of GDP 28

29. Direct and Indirect tax revenues 29

30. Longer-term tax revenue trends 30

31. Tax revenue – 2013/14 31 Tax Revenue Estimates for 2013/14 (R million) 2013 Budget Review 2013 MTBPS 2013 MTBPS vs. 2013 Budget 2014 Budget Review 2014 Budget vs. 2013 Budget Actual 2013/14 Actual vs. 2014 Budget 1. Persons / individuals 306 188 307 700 1 512 308 930 2 742 309 801 872 2. Companies 169 830 170 200 370 176 965 7 135 177 282 317 3. Value-added tax 242 990 242 500 -490 239 286 -3 704 237 781 -1 506 4. Secondary Tax on Companies / Dividend Withholding Tax 22 930 17 000 -5 930 17 000 -5 930 17 309 309 5. Specific excise duties 31 265 29 200 -2 065 28 943 -2 322 29 138 195 5. Fuel Levy 44 970 43 500 -1 470 43 300 -1 670 43 685 385 6. Custom / import duties 41 340 45 100 3 760 44 500 3 160 44 103 -397 7. Other 1 38 491 39 804 1 313 40 076 1 586 40 751 674 Total tax revenue 898 004 895 004 -3 000 899 000 996 899 849 849 Non-tax revenue 23 328 17 950 -5 379 30 541 7 213 29 776 -765 of which: Mineral and petroleum royalties 5 900 6 189 289 6 500 600 6 439 -61 Less SACU -43 374 -43 270 104 -43 374 0 Total budget revenue 877 958 869 683 -8 274 886 167 8 209 886 250 84 1:Includes - transfer duty, STT, estate duty, and other indirect taxes

32. Personal income tax tables 32

33. Personal income tax - distribution 33

34. PIT reforms between 1998 and 2012 Between 1998/99 and 2003/04 the bottom income threshold was increased by 17.7 per cent per annum and that of the top income bracket by 16.6 per cent per annum Between 1998/99 and 2002/03 the marginal rates decreased by between 1 and 9 percentage points : 1 (bottom) by 1 percentage points from 19% to 18% 2by 5 percentage points from 30% to 25% 3by 9 percentage points from 39% to 30% 4by 8 percentage points from 43% to 35% 5by 6 percentage points from 44% to 38%, and 6 (top)by 5 percentage points from 45% to 40% Between 2003/04 and 2012/13 the bottom threshold was increased by 9.0 per cent per annum and that of the top income bracket by 9.6 per cent per annum. The marginal tax rates have remained unchanged during this period. The tax free threshold was increase by 8.2 per cent per annum since 1998 34

35. Personal Income tax rates 35 Taxable Income PIT bracketMarginal personal income tax rate for the six brackets BudgetTax yearBottomTop123456 120132013/14165 600638 60018%25%30%35%38%40% 220122012/13160 000617 00018%25%30%35%38%40% 320112011/12150 000580 00018%25%30%35%38%40% 420102010/11140 000552 00018%25%30%35%38%40% 520092009/10132 000525 00018%25%30%35%38%40% 620082008/09122 000490 00018%25%30%35%38%40% 720072007/08112 500450 00018%25%30%35%38%40% 820062006/07100 000400 00018%25%30%35%38%40% 920052005/0680 000300 00018%25%30%35%38%40% 1020042004/0574 000270 00018%25%30%35%38%40% 1120032003/0470 000255 00018%25%30%35%38%40% 1220022002/0340 000240 00018%25%30%35%38%40% 1320012001/0238 000215 00018%26%32%37%40%42% 1420002000/0135 000200 00018%26%32%37%40%42% 1519991999/0033 000120 00019%30%35%40%44%45% 1619981998/9931 000120 00019%30%39%43%44%45%

36. Personal income tax brackets & rebates 36 Personal Income Tax Taxable Income Income tax thresholdRebatePIT reliefPIT bracket BudgetTax year< 6565 and >75 and >PrimarySecondaryTertiaryR billionBottomTopBottomTop Rand % Change 120132013/1467 111104 611117 11112 0806 7502 2507.0165 600638 6003.5% 220122012/1363 55699 056110 88911 4406 3902 1309.5160 000617 0006.7%6.4% 320112011/1259 75093 150104 26110 7556 0122 0008.1150 000580 0007.1%5.1% 420102010/1157 00088 528 10 2605 675 6.5140 000552 0006.1%5.1% 520092009/1054 20084 200 9 7565 400 13.5132 000525 0008.2%7.1% 620082008/0946 00074 000 8 2805 040 7.2122 000490 0008.4%8.9% 720072007/0843 00069 000 7 7404 680 8.4112 500450 00012.5% 820062006/0740 00065 000 7 2004 500 13.5100 000400 00025.0%33.3% 920052005/0635 00060 000 6 3004 500 6.880 000300 0008.1%11.1% 1020042004/0532 22250 000 5 8003 200 4.074 000270 0005.7%5.9% 1120032003/0430 00047 222 5 4003 100 13.370 000255 00075.0%6.3% 1220022002/0327 00042 640 4 8603 000 15.040 000240 0005.3%11.6% 1320012001/0223 00039 154 4 1403 000 8.338 000215 0008.6%7.5% 14 20002000/0121 11136 538 3 8002 900 9.935 000200 0006.1%66.7% 15 19991999/0019 52633 717 3 7102 775 4.933 000120 0006.5%0.0% 16 19981998/9918 50031 950 3 5152 660 3.731 000120 000

37. Adjustments to personal income tax brackets The fairness (vertical equity) and progressivity of the personal income tax system is note only dependent on the marginal tax rates but also on how the income tax brackets are adjusted to take account of inflation as wages and salaries increases over time. In the context of a progressive personal income tax system such as ours (with six income tax brackets) and in an inflationary environment individuals are faced with higher tax liabilities if wages and salaries are increased to account for inflation (cost of living adjustments) but the personal income tax brackets are not. Since 2000 all the personal income tax brackets were increased at least by inflation. In some years the these thresholds were increases above inflation. This policy stance has provided real income tax relief for all taxpayers, with most of the relief to lower and middle income earners. Personal income tax reforms since 2000 have maintained the progressivity and of the personal income tax system and the level of income (in)equality amongst individual above the income tax threshold. Personal Income tax is the main progressive tax instrument of our tax system. The absence of a sound fiscal drag policy will negatively effect the progressivity of the personal income tax system. 37

38. PIT /COE – estimated average “effective” personal income tax rate 38

39. Personal Income Tax Revenue as a % of Compensation of Employees 39

40. CIT headline rate and CIT revenue 40

41. “Average effective” corporate income tax rate - % of net operating surplus 41

42. Fuel Sales, litres - million 42

43. Fuel – Litres per real GDP’000 (2005 prices) 43

44. Fuel levy – petrol, 93 Octane - cents / litre: (Nominal and Real = 2008 prices) 44

45. Fuel levy revenue 2011/12: R36.6 billion; 21.7 billion litre; 50 800 MtCO 2 45

46. Incidence of the tax system - households Overall the tax system is progressive because of PIT The tax burdens from the main taxes are as follows: expressed as a % of income (or a percentage of expenditure in the case of VAT) 46 (Source: Woolard et al., 2005, Tax Incidence Analysis)

47. Fiscal incidence (see slide 3) Fiscal redistribution increased in the period after 2000 and the expansion of spending on social grants in particular had contributed by 2006 to a highly redistributive fiscal stance. Yet, despite this, much inequality remains. Reason – massive degree of inequality in pre-transfer income, which remains the biggest challenge to perceived equity of outcomes. The scope for further fiscal redistribution is now constrained by the size of the budget and by the extent of redistribution that has already occurred. Major impediment to more social equity now rather appears to lie in the inefficiency of the social delivery process among the poor. Source: van den Berg, S 2006. Fiscal incidence od social spending in South Africa 47

48. GDP: Demand side (Expenditure) Y= C+G+I + (X-M) (2005 real prices - index at 2000 = 100 48 200020082013 ’13 vs. ‘00 Final consumption expenditure 80%83%88%7.8% Gross capital formation 14%21%20%5.6% Exports 29%28%25%-4.0% Imports -23%-32% 9.2% GDP -- Expenditure on 100%

49. GDP (Production side) at basic prices (2005 prices) – by sector 49

50. GDP at basic prices (2005 prices) – by sector 50 2000200620082013 ’13 vs. ‘00 Agriculture, forestry and fishing3%2%3%2%-1% Mining and quarrying9%7%6% -3% Manufacturing19% 18%17%-2% Electricity, gas and water2% -1% Construction2%3% 1% Wholesale, retail and motor trade; catering and accommodation14% 0% Transport, storage and communication9%10% 1% Finance, real estate and business services19%22%23%24%6% General government services17%15%14%15%-1% Other - Community, social & per, services7%6% 0% Gross value-added at basic prices100%

51. Comment “It is now twenty years since South Africa became a democracy in 1994. The transition to a fully democratic state contributed positively to the lives of many of its citizens. Real GDP per capita has increased by approximately 40% (34% between 1993 and 2013), despite two global financial crises. Living standards have also improved, with the percentage of people in the LSM 5 - 10 range increasing from 48% in 2001 to in excess of 75% at present. And while our country continues to face challenges such as corruption and poor service delivery, we can still say that we live in a land of opportunity.” Jannie Mouton, PSG Group Limited, Annual Report 2014. Chairman’s letter 51

52. Thank you 52

53. How the tax system respond to the business cycle 53

54. Historical tax rates 54

55. Incentives for businesses Tax incentives –Accelerated depreciation for mining, manufacturing, renewable energy, etc. –MIDP / APDP –Industrial policy - SIP & 12i –Learnership allowance – tax incentive –Employment tax incentive –Research and development –Urban development zones (buildings) –Film incentive –Small business corporations –Energy efficiency savings tax incentive (12L) –International shipping –IDZ / SEs On budget allocations – cash grants, DTI –Manufacturing Competitiveness Enhancement Programme (MCEP) –The Clothing and Textiles Competitiveness Programme (CTCP) –Automotive Investment Scheme (AIS) – part of APDP

56. CTI Revenue (provisional) by Sector 56 CIT - Provisional: % Share by sector2001/022002/032003/042004/052011/122012/13 FINANCE, INSURANCE, REAL ESTATE AND RELATED SERVICES – including Long Term Insurers28%31%33%35%34%36% MANUFACTURING30%31% 32%24%22% RETAIL AND WHOLESALE TRADE8%7%10%11% TRANSPORT, STORAGE AND COMMUNICATION8%6% 9%8% MINING AND QUARRYING18%17%11%4%11%8% SPECIALISED SERVICES4%3%4% 5%4% OTHER1%0% 2%4% AGENCIES AND OTHER SERVICES1% 2% CONSTRUCTION1% 2% AGRICULTURE, FORESTRY AND FISHING1%2% 1%2% ELECTRICITY, GAS AND WATER1%

57. Manufacturing sector: Employees per GDP & per Fixed Capital Stock per GDP – R mn, 2005 prices 57

58. Manufacturing sector 58 Manufacturing - Real prices (2005) 1994 - 20082008 - 20121994 - 2012 Real growth per annum14 years4 years18 years Gross fixed capital formation (I)6.5%-2.0%4.6% Depreciation of Capital Stock7.0%3.0%6.1% Fixed Capital Stock1.9%-0.3%1.4% Gross Value Added - basic prices3.5%0.2%2.7% Employment-1.0%-3.0%-1.5%

59. Manufacturing employment 59