Plan for a ‘white tax’ in South Africa

Russell Lamberti, an executive director and the chief economist at Sakeliga, said that the push for a transformation fund is merely a ‘white tax’.

Minister of Trade, Industry and Competition, Parks Tau, first proposed the R100 billion transformation fund two years ago.

Tau explained that the fund would be administered by the National Empowerment Fund (NEF) and would issue funding in line with BBBEE regulations.

He said money for the fund would be raised in accordance with the BBBEE codes of good practice and through the Competition Commission’s public-interest participation.

“Entities are obliged under the BBBEE codes to contribute an equivalent of 3% of annual net profit after tax for the development of black suppliers,” Tau said.

President Cyril Ramaphosa promoted the new transformation fund during his 2025 State of the Nation Address.

“The government will set up a transformation fund worth R20 billion a year over the next five years to fund black-owned and small business enterprises,” he said.

“It will ensure businesses owned by women, youth and persons with disabilities receive equitable opportunities in government contracts.”

In June 2026, Ramaphosa doubled down on transformation, saying that it remains a key pillar of the government’s economic programme.

The President said the government will continue to use all available policy levers to deconcentrate ownership.

This includes competition laws, black economic empowerment (BEE) legislation, sector codes, and preferential procurement.

“There is both a constitutional and economic imperative to correct the skewed patterns of ownership, control, and participation in the economy,” Ramaphosa said.

He explained that one of the more recent government interventions is the establishment of the Transformation Fund.

The transformation fund is a ‘white tax’

Lamberti said that there is an increasing proliferation of transformation funds requiring businesses to pay into them.

“This represents a whole new offshoot of BEE. This could be a manifestation of the latest phase of BEE or of the direction the policy is generally moving.”

He said this shifts the transformation to where, instead of structuring equity deals, businesses just put money into a big government slush fund through equity equivalents.

“So, you just pay the money. Just pay the ‘white tax’, so you can pay to play. Once you’ve paid the tax, you’re allowed to participate,” he said.

Lamberti said that there are several problems with the transformation funds, which are essentially a white tax.

“Beyond the ethical issue, it still represents a considerable cost. This cost can easily be ratcheted higher at the government’s discretion,” he said.

“It is unacceptable. We don’t accept it, and businesses shouldn’t accept it. This is why we litigate against it.”

Lamberti added that white people are the primary target of the government’s black economic empowerment and employment equity regulations.

“One of the mechanisms the government has used for decades is race-targeted restrictions on economic activity, primarily targeted against white people,” he said.

“There is a regulatory onslaught and a desire to restrict economic participation on the basis of race.”

“There is a desire to displace companies of their share ownership and to displace employees if they’re the wrong colour.”

He argued that these race-targeted restrictions have negative consequences for just about everyone in South Africa.