The DA objects to Lebogang Maile, the Gauteng MEC for economic development, asking the Reserve Bank to stop the liquidation of Drip Group’s footwear business.
Drip is in danger of liquidation due to its non-compliance with tax laws, according to reports and a statement made this week by Maile.
Maile is the executive head of the Gauteng Enterprise Propeller (GEP), a provincial government organisation in charge of offering financial services to companies.
Maile challenges a procedure that he views as punitive in his posts.
“We agree with him when he says that the investigative process should not take as long as two years,” said the DA’s Mike Moriaty.
“Indeed, the DA is also concerned about the plight faced by this company, as well as many other small businesses.
“While we also want clarity on whether SARB [SA Reserve Bank] invoked a sudden death liquidation or offered an alternative arrangement, we do not believe that the answer must be the cancellation of a tax debt.”
Criticism of Reserve Bank is reckless
Maile’s public criticism of the Reserve Bank, according to Moriarty, is reckless because it could be assumed that he is trying to have Drip Group’s tax debt written off.
Despite the MEC’s long string of posts, at the centre of it all is one company.Â
“If the [Gauteng] department of economic development was functioning properly, Maile could provide evidence to support his claims of many such businesses buckling under the Reserve Bank’s ‘punitive’ actions,” said Moriaty.
“Much of South Africa’s tax revenue goes to the millions of poor people in our country. By implicitly calling for a write-off, MEC Maile is essentially depriving poor people of essential government services.”
He continued by saying that Maile has put the onus of educating SMMEs (small, medium, and micro enterprises) about the complexity of tax laws on the Reserve Bank.
“Nowhere does he criticise his own agency, GEP, which consumes taxpayer money to achieve precisely that.
“He is tacitly conceding that they have failed Drip Group and all the other township-based SMMEs he claims to be advocating for.”
