IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
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Inception date: 09 Mar 2018 | Removal date: open ended
Still in force

Tax or social insurance relief

On 9 March 2018, the Department of Trade and Industry (DTI) of South Africa issued Notice 111 announcing the approval of an application made by NCP Alcohol (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local alcohol manufacturer which is deductible from taxable income is ZAR 283.6 million (USD 24 million), and the training allowance is circa ZAR 2.8 million (USD 237,000).

The DTI has stated that from the company's total investments estimated at ZAR 816 million (USD 69 million), the manufacturing qualifying assets accounted for ZAR 810 million (USD 68.6 million). Due to the specific characteristics of the project, the DTI classified this investment as a Brownfield project.

The purpose of the investment is to manufacture bioethanol from dried distillers grain solubles.

 
Section 12I Tax Allowance Incentive
The 12I Tax Incentive seeks to promote Greenfield and Brownfield investments with the objective to boost the productivity of the South African manufacturing sector and increase the productivity of the human capital.
 
The minimum investment required in qualifying assets is ZAR 50 million for a greenfield project (projects that use only new and unused manufacturing assets) and an additional investment of ZAR 30 million for a brownfield project (expansions or upgrades of existing industrial complexes). 
 
The total investment allowance range between 35% and 55% (or ZAR 350 million and ZAR 900 million) depending on the type of the investment, the status classification, and the localization.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

341 Basic organic chemicals
2909 Ethers, etheralcohols, etherphenols, etheralcoholphenols, alcohol peroxides, ether peroxides, ketone peroxides (whether or not chemically defined), and their halogenated, sulphonated, nitrated or nitrosated derivatives.
290919 Other

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