Game farmers sliding under the tax net

According to the SA Revenue Service's 2012 statistics, there are about 63000 individual taxpayers earning more than R1-million a year. That's one in 789 South Africans and about 16000 more than there were in 2008. Inflation probably has a lot to do with that.

There are just over 2000 taxpayers who earn more than R5-million a year - about one in 25000 South Africans.

A lot of their income comes from share options. In total, 36000 taxpayers received share-option benefits totalling R6-billion during the 2011 tax year, down from the 60000 taxpayers who received R11-billion in 2008.

So SARS has lost R25-billion a year in taxable income from share options between 2008 and 2011.

In the 2011 tax year the top 612 executives pocketed share-option benefits totalling R2.4-billion, a R3.9-million average per taxpayer. In 2008 the top 812 taxpayers received R4.9-billion, an average of about R5.7-million per taxpayer.

Man, the rich must be feeling the pinch. Unfortunately the SARS statistics stop short of analysis of categories above R5-million a year.

In last week's medium-term budget policy statement, the National Treasury said "global food prices are expected to push domestic inflation higher over the next six to 12 months, but not as dramatically as during the 2008 food-price crisis. Food-price inflation is expected to average about 9% in 2013, up from 5.1% in August 2012".

The increase in poverty in rural towns is tangible. The annual mohair clip has declined to below two-million kilograms, down from 12 million kilograms 20 years ago. Any fool can see all is not well. All the excitement is around record game prices from new game farmers - business executives.

How much of SA's dwindling wealth from share-option benefits is being invested in the game industry, thereby displacing agricultural production? And how many farmworkers are now living in townships, rezoned by game farming operations, many resembling private tax-deductible zoos?

Are the local authorities correctly rating game-farming activities or are they slipping through under the rating concessions granted to agriculture?

We need answers. People in rural South Africa cannot eat scenery.

• Lester is a professor at Rhodes Business School. For more see www.criticalthought.co.za