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 Arengo 316 Pty Ltd for the 12I Tax Allowance Programme. As a result, the government granted the local biofuels manufacturer with an investment and training allowance deductible from taxable income of ZAR 554 million (USD 68.9 million). The Ministry estimates the foregone revenue to be ZAR 155,162,602 (USD 19.2 million). 

The DTI has stated that from the company's total investments estimated at ZAR 1,800 million (USD 223.9 million), the manufacturing qualifying assets accounted for ZAR 1,777 million (circa USD 221 million). Due to the specific characteristics of the investment, this project was classified as a Greenfield project.

The purpose of the investment is to manufacture fermentable fuel grade ethanol.

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

241 Ethyl alcohol; spirits, liqueurs & spirits
2207 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol. or higher; ethyl alcohol and other spirits, denatured, of any strength.
220710 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol. or higher

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