South Africa is still discussing whether to set up a new fund to promote Black-owned businesses, and suggestions that new taxes will be imposed to capitalise it are unfounded, the nation’s trade and industry minister said.

Policies aimed at racially transforming South Africa and their implementation are being comprehensively reviewed, and “the fund is a component of an overarching conversation,” Parks Tau said on the sidelines of strategy meeting convened by the African National Congress, the country’s largest political party, in Johannesburg on Sunday.

Its establishment is still at a conceptual stage, and will still have to be mapped out and pass through relevant government channels, he said.

The Democratic Alliance, South Africa’s second-biggest party and a member of the nation’s 10-member ruling alliance, last week said the trade department wanted to channel money to a R100 billion diversity fund to boost Black-owned businesses that would be raised by imposing new taxes on existing firms.

Under the country’s rules on so-called Black economic empowerment, companies contribute 3% of their annual after-tax profit to the development of Black suppliers through various initiatives.

“The transformation fund is not intended to be a new source of revenue, as alleged, by introducing an additional tax, it certainly is not,” Tau said. “It is looking at current equity-equivalent funding, it is looking at enterprise and supply development funding and other sources of funding.”