ANNOUNCEMENT 28 Feb 2014
The South African government approved a tax incentive for Moxisign (Pty) Ltd as part of the Tax Allowance Program.
NUMBER OF INTERVENTIONS
Government Gazette. The Republic of South Africa. Volume 584 No. 37364 of 28 February 2014. Department of Trade and Industry. Notice 134 of 2014. Available at: https://archive.opengazettes.org.za/archive/ZA/2014/government-gazette-ZA-vol-584-no-37364-dated-2014-02-28.pdf
Department of Trade and Industry. Section 12I Tax Allowance Incentive (12I TAI). Available at: http://www.dti.gov.za/financial_assistance/docs/12I_TAI_Information.pdf
On 28 February 2014, the Department of Trade and Industry (DTI) of South Africa adopted Notice 132 announcing the approval of an application made by Moxisign (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the pharmaceutical distributor which is deductible from taxable income is ZAR 842.7 million (USD 72 million), and the training allowance is circa ZAR 10.7 million (USD 915,000).
The DTI has stated that from the company's total investments estimated at ZAR 947.4 million (USD 81 million), the manufacturing qualifying assets accounted for ZAR 842.7 million (USD 72 million). Due to the specific characteristics of the project, the DTI classified this investment as a Brownfield project.
The purpose of the investment is to manufacture API and API biological peptides.
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.