IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 15 Jul 2015 | Removal date: open ended
Still in force

Tax or social insurance relief

On 15 July 2015, the South African Minister of Trade signed a new deal that allowed for Naledi Forging R1,710,074,080 in tax breaks to be spent on investments and personnel training related to the manufacture of train locomotive and wagon wheels. The Ministry estimates the foregone revenue to be R252,534,240 (USD 20,458,893 at the time).

The described tax break is awarded under Section 12I of the South African Income Tax Act of 1962. Section 12I allows for tax incentives in both “Greenfield investments” that are considered new industrial projects that utilise only new and unused manufacturing assets as well as “Brownfield investments” which are expansions or upgrades of existing industrial projects. Such investments are to be destined to manufacturing assets and training of employees allocated to such projects. Priority is given to the latter type of projects. Allowances for the manufacturing sector may amount to up to R900 million and up to R30 million for training purposes per participating firm. Subject to the approval of the Minister of Trade, these allowances are deductible from the taxable income of the participating company.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

491 Motor vehicles, trailers & semi-trailers; parts
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05.
870870 Road wheels and parts and accessories thereof
495 Railway & tramway locomotives & rolling stock; parts
8607 Parts of railway or tramway locomotives or rollingstock.
860719 Other, including parts

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