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Managing South Africa's economy

South Africa's economy is managed primarily by three state pillars: the South African Reserve Bank, National Treasury, and Department of Trade and Industry.

Related organisations of importance to investors are the Development Bank of Southern Africa, Industrial Development Corporation of SA, SA Revenue Service and Competition Commission.

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• South African Reserve Bank
• National Treasury
• Department of Trade and Industry
• Development Bank of Southern Africa
• Industrial Development Corporation
• SA Revenue Service
• Competition Commission

South African Reserve Bank
The South African Reserve Bank (SARB) and the National Treasury together constitute the monetary authority in South Africa.

The SARB acts as the central bank for the country and its banking institutions, is co-responsible for formulating South Africa's monetary policy, and is largely responsible for implementing this policy.

The Reserve Bank has a significant degree of autonomy in terms of South Africa's Constitution and performs its functions independently, although it holds regular consultations with the minister of finance.

Its primary goal, as defined in the Constitution, is to protect the value of the currency. This requires the achievement and maintenance of financial stability.

The SARB sees it as essential that South Africa has a growing economy based on the principles of a market system, private and social initiative, effective competition, and social fairness. It recognises the need to pursue balanced economic policies that enhance both development and growth.

• More on the Reserve Bank

National Treasury
South Africa's National Treasury seeks to advance economic growth and job creation through appropriate macro-economic, fiscal and financial policies.

The Treasury plays a pivotal role in the management of government expenditure, setting financial management norms and standards for state departments, monitoring their performance and reporting any deviations to the Auditor-General.

• More on the National Treasury

Department of Trade and Industry
The Department of Trade and Industry (DTI) provides a one-stop shop for investors and exporters, offering a variety of services to those interested in conducting business in South Africa.

Since South Africa's first democratic elections in 1994, the DTI has focused on reintegrating the country into the global economy after decades of isolation. This has required new policies and the consolidation of existing ones.

The DTI's vision is of a restructured and adaptive South African economy characterised by growth, employment and equity.

• More on the DTI

Development Bank of Southern Africa
The Development Bank of Southern Africa (DBSA) promotes economic development by fostering the growth of productive enterprise and efficient capital markets in southern Africa.

The DBSA's private sector investments unit, in particular, plays a unique role in facilitating private sector provision of infrastructure in support of sustainable economic development in the southern African region.

The unit was established in 1996 in response to a worldwide trend towards increased private sector involvement in infrastructure, and the need for an appropriate source of financial support for public-private partnerships in southern Africa.

Industrial Development Corporation
The state-owned Industrial Development Corporation of South Africa (IDC) promotes industrial development by offering a range of financing facilities to help private sector entrepreneurs set up manufacturing concerns in South Africa and the southern African region.

The IDC provides development capital to new and existing undertakings, usually in the form of low-interest, medium- to long-term loans for acquiring fixed assets.

South African Revenue Service
South Africa has a well-developed and regulated taxation regime based on international best practice. The tax regime is set by the National Treasury and managed by the South African Revenue Service (Sars).

The principal source of direct taxation revenue in South Africa is income tax. Individuals are taxed on a progressive basis up to a maximum rate of 42% on taxable income exceeding R215 000 per annum. A uniform rate of tax is applied to all individuals, irrespective of gender or marital status, and without child rebates.

Tax on the income of non-South African residents is source-based, meaning that all income arising from a source within (or deemed to be within) South Africa is taxed, irrespective of the residence of the recipient of the income.

Domestic companies are taxed at a flat rate of 30%. However, branches and agencies of foreign companies which have their effective management outside South Africa are subject to taxation on South African-sourced profits at a rate of 35%.

• South African tax for investors

Competition Commission
While South Africa's economy is predominantly free market-based, competition is controlled. The Competition Act of 1998 fundamentally reformed the country's competition legislation, strengthening the powers of the competition authorities along the lines of the European Union, US and Canadian models.

The Act provides for various prohibitions on anti-competitive conduct, restrictive practices (such as price fixing, predatory pricing and collusive tendering) and "abuses" by "dominant" firms (firms with a market share of 35% or more).

The Competition Commission is responsible for investigating and evaluating mergers and prohibited practices. It has the power to disallow small and intermediate mergers, and makes recommendations on larger mergers to the Competition Tribunal.

Both bodies are independent of the government, although the minister of trade and industry appoints the Competition Commissioner and the President appoints the members of the Tribunal.

• South African competition law