The graphics below detail the key changes, in terms of the new requirements:<\/p>\n
![\"BEE](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/07\/BEE-Scorecard-changes.png\")
<\/a>BEE Scorecard changes | NPAT = Net Profit After Tax<\/p><\/div>\n
<\/a>BEE Status levels changes<\/p><\/div>\n
BEE for entrepreneurs<\/h3>\n
According to the report,\u00a0BEE is seen as being more than a ‘cost of doing business’ – such as taxes or affirmative action – but rather\u00a0as\u00a0the gradual expropriation of the business itself, where entrepreneurs are replaced with political favourites.<\/p>\n
“In short, BEE is Affirmative Action for entrepreneurs,” it said.<\/p>\n
According to head of the Solidarity Research Institute, Piet le Roux, where Affirmative Action seeks to replace employees, BEE seeks to replace employers.<\/p>\n
Further, BEE measures entrepreneurs by political criteria rather than by ability to contribute to economic growth – the main driver of wealth creation.<\/p>\n
\u201cConsequently, those advantaged by BEE obtain greater control over resources and capital,” he said.<\/p>\n
“Given their political status, such entrepreneurs are less pressured to focus on the interests of consumers and the economy.”<\/p>\n
“This means that unsuccessful entrepreneurs remain in their positions for much longer than would have been the case in normal market conditions.”<\/p>\n
Le Roux warned that should entrepreneurs continue to be handicapped by BEE, unemployment would rise and poverty would increase.<\/p>\n
Read:\u00a0How many black South Africans benefit from BEE<\/a><\/strong><\/p>\n “Local business persons would move their investments and businesses abroad while foreign business would think twice about South Africa.”<\/p>\n Notably, the AfriBusiness report detailed how much companies stood to lose in order to be BEE compliant through the new codes.<\/p>\n Graphs showing how BEE codes push business away<\/p><\/div>\n It argued that the codes effectively disincentivise businesses from investing\u00a0locally, due to the opportunity cost of doing business in the country.<\/p>\n The report said that compliant investors start off with more than half their capital not in their own hands, and would need to see an “unrealistic” 124% return to make an overall 10% return.<\/p>\n However, if a business took its capital to a free market elsewhere – such as Mauritius and Botswana – only a 10% return would be needed.<\/p>\n Further, the group said that companies also run the risk of having government pull the rug from under them, as it has ability, without peer review, to change investment rules.<\/p>\n “The new legislation is suicidal and stands in direct opposition to all business wisdom,” AfriBusiness said.<\/p>\n The full report, titled <\/em>BEE vs Your Business, can be downloaded here<\/a>.<\/em><\/p>\n How many black South Africans benefit from BEE<\/a><\/strong><\/p>\n How government plans to legalise corruption: Helen Zille<\/a><\/strong><\/p>\n“Suicidal” business logic<\/h3>\n
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