ANNOUNCEMENT 21 Sep 2012
The government of South Africa approved a tax incentive for PhytoAmandla (Pty) Ltd as part of the Tax Allowance Program.
NUMBER OF INTERVENTIONS
Government Gazette. The Republic of South Africa. Volume 567 No. 35690 of 21 September 2012. Department of Trade and Industry. Notice 763 of 2012. Available at: https://archive.opengazettes.org.za/archive/ZA/2012/government-gazette-ZA-vol-567-no-35690-dated-2012-09-21.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 21 September 2012, the Department of Trade and Industry (DTI) of South Africa issued Notice 763 announcing the approval of an application made by PhytoAmandla (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local company which is deductible from taxable income is ZAR 900 million (USD 109.2 million), and the training allowance is ZAR 9.5 million (circa USD 1.2 million).
The DTI has stated that from the company's total investments estimated at ZAR 2,871.3 million (USD 348.4 million), the manufacturing qualifying assets accounted for circa ZAR 2,256.7 million (USD 273.8 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 biofuel, glycerine and crop meal.
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.