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: 29 Apr 2016 | Removal date: open ended
Still in force

Tax or social insurance relief

On 29 April 2016, the Department of Trade and Industry (DTI) of South Africa issued Notice 489 announcing the approval of an application made by Mondi Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the paper and consumer packaging manufacturer which is deductible from taxable income is  ZAR 187.3 million (USD 13 million), and the training allowance is ZAR 1.4 million (USD 98,000).

The DTI has stated that the manufacturing qualifying assets accounted for the company's total investments estimated at ZAR 340.6 million (circa USD 24 million), and 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 packaging paper and pulp.

 
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

321 Pulp, paper & paperboard
4703 Chemical wood pulp, soda or sulphate, other than dissolving grades.
470311 Coniferous
470321 Coniferous
470329 Nonconiferous
4805 Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in Note 3 to this Chapter.
480524 Weighing 150 g/m² or less
480525 Weighing more than 150 g/m²
480530 Sulphite wrapping paper
480540 Filter paper and paperboard
480591 Weighing 150 g/m² or less
480593 Weighing 225 g/m² or more
4819 Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibres; box files, letter trays, and similar articles, of paper or paperboard of a kind used in offices, shops or the like.
481910 Cartons, boxes and cases, of corrugated paper or paperboard
481920 Folding cartons, boxes and cases, of noncorrugated paper or paperboard
481930 Sacks and bags, having a base of a width of 40 cm or more
481940 Other sacks and bags, including cones
481960 Box files, letter trays, storage boxes and similar articles, of a kind used in offices, shops or the like

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