ANNOUNCEMENT 09 Oct 2015
The government of South Africa approved a tax incentive for Burgan Cape Terminals (Pty) Ltd as part of the Tax Allowance Program.
NUMBER OF INTERVENTIONS
Government Gazette. The Republic of South Africa. Volume 604 No. 39275 of 9 October 2015. Department of Trade and Industry. Notice 961 of 2015. Available at: https://archive.opengazettes.org.za/archive/ZA/2015/government-gazette-ZA-vol-604-no-39275-dated-2015-10-09.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 9 October 2015, the Department of Trade and Industry (DTI) of South Africa adopted Notice 961 announcing the approval of an application made by Burgan Cape Terminals (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local storage provider and distributor which is deductible from taxable income is circa ZAR 233.7 million (USD 17.5 million), and the training allowance is ZAR 792,000 (circa USD 59,000).
The DTI has stated that the manufacturing qualifying assets accounted for the company's total investments estimated at ZAR 667.6 million (USD 50 million), and due to the specific characteristics of the project, the DTI classified this investment as a Greenfield project.
The purpose of the investment is to blend fuel 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.