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: 21 Oct 2011 | Removal date: open ended
Still in force

Tax or social insurance relief

On 21 October 2011, the Department of Trade and Industry (DTI) of South Africa issued Notice 760 announcing the approval of an application made by Sappi Southern Africa (Pty) Limited for the 12I Tax Allowance Programme. As a result, the government granted the local paper manufacturer with an investment allowance deductible from taxable income of ZAR 550 million (USD 68.4 million), and a training allowance of circa ZAR 2.2 million (circa USD 274,000). The Ministry estimates the foregone revenue to be ZAR 154,624,960 (USD 19 million). 

The DTI has stated that from the company's total investments estimated at ZAR 2,332 million (USD 290 million), the manufacturing qualifying assets accounted for ZAR 2,247 million (circa USD 279 million). 

The purpose of the investment is to manufacture chemical cellulose.

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

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