Tax tightrope — what the Budget means for your wallet
Finance Minister Enoch Godongwana's latest (and hopefully final) Budget speech introduced no major tax hikes. Kicking the can down the road, R20-billion in additional tax measures are set to be served up in the 2026 budget, unless the SA Revenue Service can bring in extra cash. General fuel levies are also set to increase on 4 June 2025.
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eNCA
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SIU freezes assets over R20m linked to irregular Transnet contracts
JOHANNESBURG - The Special Investigating Unit has frozen assets worth over R20-million linked to irregular Transnet contracts. The investigation targets three property valuation contracts worth 89 million rand, awarded between 2019 and 2022. The frozen assets include luxury vehicles and properties in Johannesburg's Bryanston, Fourways and Broadacres.
Daily Maverick
13 hours ago
- Daily Maverick
New rules mandate energy-efficient motors — a win for SA's strained power grid
As of June 2025, South Africa has activated mandatory regulations that affect a R3-billion industry and will result in annual energy savings of 840 gigawatt hours — enough to power a city the size of Polokwane or approximately 140,000 households for a year. Electric motors might not sound exciting — but they're everywhere. They power conveyor belts in factories, water pumps on farms, fans in cooling systems, and crushers in mines. And as of June 2025, every new motor sold in South Africa will have to meet higher energy efficiency standards. That's because South Africa has officially implemented its Minimum Energy Performance Standards (Meps) for electric motors, bringing the country in line with global standards. The change affects a R3-billion industry, with the goal of saving up to 10% of energy per low voltage motor — which is significant in a country where demand exceeds supply. The new rule requires that most three-phase, low-voltage electric motors sold in South Africa meet IE3 (International Efficiency) standards. Less efficient IE1 and IE2 motors will be phased out over time, as old ones reach their end of life. Regulated by the National Regulator for Compulsory Specifications, this shift applies to motors rated between 0.75 kW and 375 kW with two, four, six, or eight poles — the kind you'd find in factories, farms, and commercial buildings. According to the International Energy Agency, electric motors and motor systems are responsible for about 53% of the world's total electricity consumption. And standards like MEPs offer the potential to reduce the energy demand of motor systems by 20 to 30% with short payback periods. Fanie Steyn, Executive of the Electric Motor Division at WEG Africa, a leading motor manufacturer, said that about 250,000 IE1 motors were imported into South Africa each year, representing a R3-billion value chain. Currently, there's a 3:1 ratio of IE1 to IE3 motors entering the country. 'From now, that's all about to change,' said Steyn. Those motors now need to be replaced with IE3 models, which are typically 4 to 10% more efficient. This might not sound like much — but considering that all electric motors account for around 65% of industrial energy use, and industry accounts for about 60% of the country's total energy demand, these efficiency gains are not negligent. 'Electric motors are the prime mover for all industry — almost everything that moves is driven by an electric motor. 'If you go to where a cold drink is bottled, the pump that pumps it, the conveyor that moves the bottles, where bread is made, or where mielies are crushed to make flour — it's all powered by motors,' he said. 'Almost everything that moves is by a motor.' Efficiency standard So starting this year, the new rules will require that all new motors meet the IE3 efficiency standard, which means they use electricity more efficiently and last longer. While the rules don't force businesses to replace existing motors immediately, over time, as older motors wear out, they will be replaced with these more efficient models. Dr Theo Covary, the lead researcher of the cost benefit analysis undertaken to inform these new regulations, estimates that this change will save South Africa 474 gigawatt hours (GWh) of electricity in the first year alone — enough to power about 44,000 homes for a year. Over the next decade, the savings will add up to 5,763 GWh, roughly the annual electricity use of a major South African city. 'The new IE3 regulation is expected to reduce electricity demand by approximately 0.25% in year one, which is reducing electricity by 0.25% in one year, 'which may seem small and insignificant but is material given the high net economic benefit to the economy', said Covary. The total cumulative energy savings of 5,763 GWh after 10 years is equivalent to the electricity used by Nelson Mandela Bay in one year. This is because as more and more older, less efficient motors reach their end of life and get replaced by more efficient models, the savings increase. In addition to energy savings, this reduction would prevent about 5 million tons of CO₂ emissions. To put this in perspective, offsetting that amount of carbon would require planting spekboom — an indigenous South African plant known for its carbon sequestration ability — over an area of approximately 3,333 square kilometres, which is about twice the size of the Western Cape's Garden Route District. Energy efficiency adds up If you consider that Eskom generated about 200 terawatt-hours (TWh) of electricity in the financial year ending March 2024, the estimated 840 GWh saved (or 0.84 TWh) from this new standard represents 0.25% of the power the country uses in a year. ' It might not sound like much, but believe me — 0.25% is a lot, and it all adds up,' said Chris Yellend, an electrical engineer and energy analyst from Business EE Intelligence. 'It's good that South Africa is following suit and becoming more energy efficient.' He added that energy efficiency measures like this offer the best returns in terms of cost. 'Instead of spending billions on new generation infrastructure, the economy can invest in efficiency — it's a no-brainer. Improving energy efficiency is the most cost-effective way of 'building' new electricity supply. It's not as insignificant as it might seem.' Steyn echoed these sentiments, saying: 'What do you do if you don't have energy? You have to build more power stations, maybe solar or wind farms — but all those options are massive projects with huge capital outlay. And it takes time and long periods of investment and installations before you can do that. 'We have an energy crisis, so in the short term one of the quickest or easiest ways to overcome that is to increase efficiency of products.' Steyn added: 'South Africa has done a phenomenal job over the years with labelling programmes — for fridges, TVs, lights. But now, finally, we're targeting the big energy consumers: electric motors.' According to a 2022 cost-benefit analysis by Covary and economist Linton Reddy of DNA Economics — which informed the regulation — these seemingly small savings are actually substantial, especially given the poor performance of Eskom's generation fleet. Despite the modest efficiency improvements, the long operating hours of motors translate into significant overall savings. To put it into context, Yelland said: 'If you value electricity at around R2.00 per kilowatt-hour, that's a saving — or a reduction in revenue to Eskom — of about R1.68-billion.' Tax breaks and rebates for motor upgrades Companies that upgrade to the new IE3 motors can tap into financial incentives. Zadok Olinga, a former president of the Southern Africa Energy Efficiency Confederation and director of resource management consultancy Oelinga, said the new minimum standards aligned with South Africa's broader push for energy efficiency — and opened the door to claiming Section 12L tax deductions and Eskom rebates. Under Section 12L, businesses can claim 95 cents per kilowatt-hour of verified energy saved as a tax deduction. Eskom also offers a 41c/kWh rebate for projects that cut electricity use — including motor upgrades — as long as minimum savings and demand reduction targets are met. Phase in Manufacturers and Original Equipment Manufacturers can still sell off their existing IE1 and IE2 stock until May 2026. End-users — such as factories or farms — aren't required to immediately replace older motors, but must buy energy-efficient ones when they do. 'Motors are built to last around 20 years,' said Van Niekerk from WEG.'But in reality, many reach end-of-life within seven to 10 years, especially in demanding environments.' For businesses that run motors 24/7, the higher upfront cost of an IE3 motor is often recovered in a matter of months through lower electricity bills. For others — say, a bakery or a workshop that runs motors eight hours a day — the payback period might be two to three years. DM
Eyewitness News
14 hours ago
- Eyewitness News
SIU freezes more than R20m worth of assets linked to irregular Transnet contracts
JOHANNESBURG - The Special Investigating Unit (SIU) has frozen more than R20 million worth of assets linked to irregular Transnet contracts. This included luxury vehicles and high-value properties. The preservation order by the SIU and Transnet is part of an ongoing investigation into three allegedly irregular contracts for property valuation services with the port and rail company. Transnet had referred various suspicious contracts involving Transnet property to the SIU for further investigation. The contracts, awarded in 2019, 2021 and 2022, have a combined value of R89 million. Working closely with Transnet, the SIU's investigation revealed serious flaws in the procurement processes, raising concerns about compliance with supply chain management regulations and the possibility of undue influence in the awarding of these contracts. The SIU and Transnet believe that Transnet may not have received full and fair value for the payments made under the disputed contracts. Restrained items include a Porsche 718 Boxster, a Porsche Macan S, a Mercedes C200, a VW Amarok, properties in Bryanston, Fourways, Broadacres and four office units in Vanderbijlpark. The order interdicts MM Real Estate (PTY) LTD, Humphrey Tshepo Moyo, Neo Shawn Matlala and any other party from selling, disposing, leasing, transferring, encumbering (including by granting rights of retention), transferring, donating, or dealing in any manner whatsoever to the frozen properties, pending the finalisation of civil proceedings.
