SIP

CIP

SSP

FIG

BBSDP

SPII

EMIA

MIDP

NIP

DCCS

LBFTP

Tax Incentives for Inner City Renewal

Regional Incentives

The Department of Trade and Industry (DTI), as well as other government departments at a national level, developed a list of side supply measures to be used in accordance with the government’s incentives and initiatives programme. These side measures range from direct grants, production support, export promotion, human skills development, infrastructure and strategic investment support, tax allowances and duty drawback facilities to name a few. The regional (provincial) government also focuses on specific support measures, such as investment promotion and investor support services, while local government focuses on specific requirements, including location and general support services. The incentives (tabled below) are available to South African and foreign investors alike. The following is a shortened version of the incentives available. For more detailed information, please visit DTI investment incentives:

• Accessible to industrial projects in manufacturing and computer related activities.
• Increase annual production of the relevant industry sector.
• Expansion of an existing project.
• Increase/ Maintain 35% annual production.
• Expected loss in South African production does not exceed 40%.
• Qualifying assets- equal or exceed R50m- limit R600 m.

• Allowance according to points-based system.

• All sectors that need infrastructure.
• Installation, construction and erection of infrastructure.
• New capital items such as equipment, support structures and tools.

• Extent of funding equals the lesser of the balance of the CIP budget for the year of application or the amount applied for or 20% for establishment of the investment project.

• All sectors that need infrastructure.

• Skills Support Programme comprising: A training grant, a learning development grant, and a capital grant.

• All sectors that need infrastructure.
• 50% foreign shareholding for at least 3 years.
• All assets installed within one year after the start of production.

• Cost expenditure except machinery and equipment.
• 15% of machinery and equipment.
• Foreign Investment Grant maximum of R3m.

• All sectors that need infrastructure.
• Majority black-owned (51% or more).
• Significant representation of black managers.
• Not exceeding R12 million annual turnover.
• At least 1 year trading history.

• Maximum grant limited of R100 000.
• Fees related to rendering of business development services (cost sharing assistance).
• Cost for acquisition of printed materials and software.

• Managerial ability, financial abilities, ability to manufacture and market products.
• Innovative proposal.
• Marketable product.

• Repayable grant of 50% of the direct cost of developing product.
• Minimum grant of R1.5m per project.

• Export/production competence and performance of the applicant.
• Potentially available/accessible production capacity.
• Extent of export marketing planning.
• Type of product and industry in which the venture operates or is planned.
• Level of labour absorption, location and technologies required.
• Membership of an expert council (not compulsory, but preferable).

• Primary export marketing research scheme: Economy class return fair, subsistence allowance, transport of samples, marketing materials, product registration, exhibition costs, rental of vehicles.

• Exporting automotive firms.

• Duty Free Allowance for completely knocked down (CKD) production in South Africa.
• 27% of the wholesale price of passenger vehicle can be imported as CKD on Duty Free.
• Export Complementation scheme generates Import Rebate Credit Certificates.
• Productive Asset Allowance (PAA) based on investments by Original Equipment Manufacturers and component suppliers.

9. National Industrial Participation Programme (NIP)

• Foreign and South African industries, enterprises, and suppliers of goods and services to government/parastatals, where the imported content of such goods and services equals to or exceed US$10m.
• SA venture which aims to generate new/additional business activities.

• Will be calculated accordingly.

• Textile and clothing manufacturers.
• Sub-sectors and suppliers to the textile sector.

• Duty credits-based on export of products.

• Film and television industry.
• Subsectors and suppliers to the film and television.
• 50%/minimum of 4 weeks of filming must be in South Africa.

• Will be calculated accordingly.

• Taxpayers refurbishing a building within a designated zone.
• Construction of new buildings within these zones.

• 20% Write-off in the first year.
• A straight-line depreciation allowance over a 5-year period.
• 20% Write-off in the first year.
• 5% a year for a further 16 years.

• New investors in the manufacturing sector.
• Expansion in the manufacturing sector.

• Contribution to asset growth.
• Contribution to employee income.
• Contribution to tax base.
• Contribution to owners' income.

http://www.dti.gov.za.