The Minister of Trade and Industry, Dr Rob Davies, today said R5, 6 billion was
made available in the form of new tax allowances to support national industrial
policy framework objectives. He was launching the new Section 12i of the Income
Tax Act tax allowance programme, 12i Tax Incentive Programme in terms of
Section 12i of the Income Tax Act, 1962 at the Sheraton Hotel in Pretoria.
The allowance is geared towards providing investment support in new
manufacturing assets and training to employees involved in such projects. It will
target new projects as well as expansions or upgrades of existing projects in the
manufacturing sector. Priority support will be given to ‘greenfield’ investments, i.e.
new industrial projects that utilise new or unused manufacturing assets; and
‘brownfield’ investments which will provide for expansion or upgrades of existing
industrial capacity.
Minister Davies said the incentive was one of a range of instruments which
support the departments’ efforts to build the productive sectors of our economy as
part of efforts to place our economy on a new labour absorbing growth path.
“The new programme will accelerate industrial investment in the form of tax
allowance for additional investment or training which will result in energy
efficiency, job creation and industrial skills enhancement.” said Minister Davies
He added that enterprises or projects would benefit from the incentive if they
invest in improved production equipment and contribute towards ensuring that
skills are upgraded in the workplace.
The programme replaces the Strategic Investment Programme (SIP) that operated
under Section 12G of the same Act, that supported 41 projects; 20 of which are in
the chemical sector, 10 in metals, and 6 in the paper and pulp sector, to the total
value of R13 billion and created 6 600 direct and 67 000 indirect jobs.
Minister Davies said the new tax allowance was designed to more specifically
support investment in the manufacturing sectors that have been identified as
having the most potential to grow rapidly and support our efforts to promote
diversification and growth of sustainable decent employment.
These sectors include metals and metals fabrication, chemicals and plastics, agroindustries
and the new ‘green’ industries.
The incentive programme will comprise of two components per project depending
on compliance:
- An investment allowance of up to a maximum of R900 million, and
- A training allowance of up R30 million.
Both allowances are deductable from the taxable income of successful applicant
companies.
Four applications have already been received under this scheme; three from the
chemical industry and one from the cement industry.
When asked how the department will improve the turn-around time of processing
applications, Francisca Strauss, Chief Director for Incentive Administration said
the department has a new six weeks turn-around time for processing applications.
“We have put systems in place to ensure that we meet our targets. That includes
cutting unnecessary delays by meeting with projects upon receiving applications to
ensure we have all relevant documentation for the processing of the application,”
she explained.
Enquiries:
Sidwell Medupe: Director of Media Relations and Publicity
Tel: 012 391 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Source: Department of Trade and Industry
