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: 13 Jul 2011 | Removal date: open ended
Still in force

Tax or social insurance relief

On 13 July 2011, the Department of Trade and Industry (DTI) of South Africa issued Notice 481 announcing the approval of an application made by Omnia Group (Ply) Ud for the 12I Tax Allowance Programme. As a result, the investment allowance deductible from taxable income granted to the local company was ZAR 232.7 million (USD 34 million), and the training allowance is ZAR 3.9 million (USD 571,500). The Ministry estimates the foregone revenue to be ZAR 66,248,809 (circa USD 10 million).

The DTI has stated that from the company's total investments estimated at ZAR 1,454.1 million (USD 213 million), the manufacturing qualifying assets accounted for circa ZAR 664.8 million (USD 97.4 million). Due to the specific characteristics of the project, the DTI classified this investment as a Greenfield project.

The purpose of the investment is to manufacture Nitric Acid.

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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