R100 billion ‘white tax’ that can end BEE in South Africa

Economist Dawie Roodt said that the government’s R100 billion transformation fund, described as a ‘white tax’, can be the start of the end of BEE in South Africa.

Roodt is an award-winning economist, author, and public commentator on financial and economic matters.

He accurately predicted the collapse of state-owned enterprises, SA’s ratings agency downgrades, and even former Finance Minister Tito Mboweni’s resignation.

One of his latest predictions is that the R100 billion transformation fund would lead to the end of black economic empowerment.

He told delegates at the 2026 Biznews Conference that he supports the new R100 billion transformation fund. However, this is not because it is a good idea.

Instead, it is because he believes that the fund would mark the end of Broad-Based Black Economic Empowerment (B-BBEE) as it currently operates.

“This is an opportunity to end BEE. We should all support the Transformation Fund on the condition that all other BEE requirements are eventually scrapped,” he said.

“If you want black economic empowerment points, you have to pay for them by putting money into the fund.”

“Once we transition to that model, the entire system will be exposed for what it really is, which is a mechanism to enrich a few well-connected individuals.”

Roodt argued that once this reality is exposed, the transformation fund will be shut down, ending the current BEE regime.

“This is a decisive step toward the end of Broad-Based Black Economic Empowerment as South Africans know it,” he said.

“We ought to encourage this transition, as it will ultimately bring BEE to an end and free South African businesses from these onerous regulations.”

He added that he is not concerned that the politicians know about this strategy, as they have no ability to say no to easy money.

“It is very unlikely that the politically connected cadres will be able to walk past a big pot of gold. That means that they would also support the plan,” he said.

The R100 billion transformation fund is a ‘white tax’

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