The Solidarity Research Institute (SRI) is going to launch its report on the state of South African state-owned entities and the value of tax money, today at a conference.
State-owned entities are measured in this report by their working capital ratio and their Earning before Interest, Taxes and Amortization (EBITA). These accounting ratios are compared to the ratios of the top 40 companies on the JSE.
Depending on the accounting ratios and general management, the five companies are also placed on a scale that reflects the value of tax money. It also looks at mismanagement, corruption and management stability.
“The money that are invested in state-owned entities does not come from a magical golden pot, but from the pockets of ordinary taxpayers who work hard for their money,” said Dr Dirk Hermann, Executive Officer of Solidarity.
“In fact, every taxpayer is a shareholder of these entities. If the government is investing in state-owned entities on behalf of the taxpayer, responsibility and accountability is expected of these entities’ management. If tax money is used to finance personal enrichment and corruption of individuals and families, taxpayers must stand together despite political boundaries, race and class for the return of value on tax money,” said Hermann.