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: 23 May 2014 | Removal date: open ended
Still in force

Tax or social insurance relief

On 23 Mai 2014, the Department of Trade and Industry (DTI) of South Africa issued Notice 373 announcing the approval of an application made by Pharmacare Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the pharmaceutical company which is deductible from taxable income is ZAR 472.3 million (circa USD 45.9 million), and the training allowance is ZAR 8.3 million (circa USD 806,000).

The DTI has stated that the manufacturing qualifying assets accounted for the company's total investments estimated at circa ZAR 1,349.5 million (USD 131 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 open an SVP2 Facility to manufacture anticoagulant pre-filled syringes.

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

352 Pharmaceutical products
3004 Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packin
300440 Containing alkaloids or derivatives thereof but not containing hormones, other products of heading 29.37 or antibiotics

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