ANNOUNCEMENT 09 Oct 2015

The government of South Africa approved a tax incentive for Southey Holdings (Pty) Ltd as part of the Tax Allowance Program.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

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

Government Gazette. The Republic of South Africa. Volume 604 No. 39275 of 9 October 2015. Department of Trade and Industry. Notice 957 of 2015. Available at: https://archive.opengazettes.org.za/archive/ZA/2015/government-gazette-ZA-vol-604-no-39275-dated-2015-10-09.pdf

Inception date: 09 Oct 2015 | Removal date: open ended

Tax or social insurance relief

On 9 October 2015, the Department of Trade and Industry (DTI) of South Africa adopted Notice 957 announcing the approval of an application made by Southey Holdings (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local naval company which is deductible from taxable income is circa ZAR 159.5 million (circa USD 12 million), and the training allowance is ZAR 5 million (USD 375,000).

The DTI has stated that from the company's total investments estimated at ZAR 290.7 million (USD 21.8 million), the manufacturing qualifying assets accounted for circa ZAR 290 million (USD 21.7 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 do dry dockings and repairing of various types of vessels.

 
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 SECTORS

 

AFFECTED PRODUCTS

 
N/A