1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

I N V E S T M E N T C L I M A T E
I N C E N T I V E S
S O U T H A F R I C A
Type A p p l i c a b i l i t y B e n e f i t s
R e s e a rch & • Scientific re s e a rch operating expenditure • 25% of the cost of capital expenditure fo r
D eve l o p m e n t • A p p roved scientific re s e a rch capital expenditure scientific re s e a rch ap p roved on a ye a r ly
basis by the CSIR may be deducted
a n nu a l ly. If the re s e a rch is discontinued
t h e re will be a recoupment of the
deductions allowe d .
E m p l oyee Housing • E recting a house for an employe e. • 50% of expenditure limited to
• Amount donated or advanced to employe e ZAR600,000 (USD 119,100)
to erect a house.
• 50% of advance/donation limited to
• E rection of at least five residential units to ZAR6,000 (USD 1,191)
house full-time employees or let to a tenant. A l l ow a n c e s :
– Initial: 10% of the cost
– A n nu a l :2% of cost limited to cost
D e p re c i a t i o n • Plant and machinery • R a t e s
M a nufacturing or similar pro c e s s – 20% p. a .
Hotel equipment – 2% p. a .
F a r m i n g
– 50%, 30 %,20% over three ye a r s
• B u i l d i n g s
• R a t e s
I n d u s t r i a l – 5%
H o t e l s – 5%
Hotel re f u r b i s h m e n t s – 20%
• N o n - m a nufacturing fixed assets Various - normally 10% - 20 %
Tax Holiday Scheme. Available to entities incorporated after Tax holiday :Tax levied at zero percent on
1 October 1996, with assets greater than taxable income for a maximum of six
ZAR 3 m (USD 595,500).
c o n s e c u t i ve ye a r s .The Tax Holiday Scheme
The entity must be a manufacturing concern must be utilised within ten years of
in terms of Major Division 3 of the Standard ap p rov a l .A two year tax holiday is aw a rd e d
Industrial Classification.
for each of the fo l l owing criteria met:
• The product being manu f a c t u red is on
the ap p roved list.
• The plant is situated in one of the
designated locations
• The human re s o u rce re muneration to
value added ratio exceeds 55%
S m a l l / M e d i u m Same applicability as for the Tax Holiday Scheme, A tax free grant from Government for a
M a nu f a c t u r i n g except that it is for enterprises with assets m a x i mum of six years in all areas of South
D eve l o p m e n t of less than ZAR3m (about USD 595,000). A f r i c a .The grant is divided into thre e
P ro g r a m m e c o m p o n e n t s :
INDUSTRIAL FINANCING INCENTIVES
Type A p p l i c a b i l i t y B e n e f i t s
Multi-shift Scheme Independent industrialists who must maintain Loans are available for the financing of
an equity level equal to at least 33% of the
a dditional working capital and equipment
value of total assets.At least one shift of 8
for increased production through an
hours should be added resulting in gre a t e r
a dditional shift at a low intere s t
e m p l oy m e n t . rate for the first three ye a r s .
Finance for Export To exporters qualifying for Credit Guarantee C o m p e t i t i ve financing in Rands or
of Capital Goods Insurance Corporation facilities and acceptable US Dollars over a period of 2 - 10 ye a r s .
South African content
Ve n t u re Cap i t a l E n t re p reneurs starting a business or high Advantageous financing
F i n a n c e
t e c h n o l o gy industry or requiring furt h e r
permanent capital to finance growth or the
c o m m e rcialisation of new technology.
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