The South African government approved a tax incentive for Pharmacare Ltd as part of the Tax Allowance Program.



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Government Gazette. The Republic of South Africa. Volume 633 No. 41488 de 9 March 2018. Department of Trade and Industry. Notice 119 of 2018. Available at:

Department of Trade and Industry. Section 12I Tax Allowance Incentive (12I TAI). Available at:

Inception date: 09 Mar 2018 | Removal date: open ended
Still in force

Tax or social insurance relief

On 9 March 2018, the Department of Trade and Industry (DTI) of South Africa issued Notice 119 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 local pharmaceutical which is deductible from taxable income is circa ZAR 427.5 million (circa USD 36.2 million), and the training allowance is ZAR 10.5 million (USD 889,000).

The DTI has stated that from the company's total investments estimated at ZAR 2,345 million (USD 198.5 million), the manufacturing qualifying assets accounted for ZAR 1,221 million (USD 103 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 small volume parenteral products. 

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.