Business Incentives
Incentives
Below are some incentive schemes available in the agriculture sector and the broader green economy.
Government Investment Incentives
The link below is the official portal for South African Government Incentives Schemes. Here you will find more information on incentives for research and development, capital expenditure, enhanced competitive advantage, specific industries and local and provincial governments. You will also find a guide to investing in South Africa.
South African Government Incentives Schemes
Wesgro's summarised incentive booklet
Source of Finance Book (Western Cape Department of Agriculture, 2017)
Department of Trade and Industry (DTI) Incentives
You can view the latest developments on incentives here as well as the uptake of these incentives per province for 2015/16. Agro-processing dominates uptake of incentives for the Western Cape. Note that the 12i Tax Allowance will come to an end in 2017, last submissions will be taken in Dec 2017. The Aquaculture Development and Enhancement Programme's (ADEP) reimbursement cost-sharing grant has increased from R 30 million to R 40 million. You can get more information at the links below (contact details included):
Latest developments on incentives
Annual performance of programmes
Energy efficiency incentives
Tax Allowance for Energy Efficiency Savings
The 12L EE Tax Incentive allows for tax deductions for energy efficiency projects that reduce energy use. Taxable income deductions are 95c/kilowatt hour (increased from 45c after 2015 Budget Speech) of energy saved and is expected to be claimable until 2020.
For more information visit: 12l EE Tax Incentive
Section 12B of the Income Tax Act offering accelerated depreciation for renewable energy machinery and implementation costs
Incentives for assets purchased
Capital Development Expenditure
This incentive is in the form of a tax deduction for capital expenses incurred for farming operations (game farming included). This deduction includes the following for sustainable agriculture: the eradication of noxious plants and alien invasive vegetation; the prevention of soil erosion and dams, irrigation schemes, boreholes and pumping plants.
For more information visit: Capital Development Expenditure
Machinery, plant, implements, utensils or article acquired
The purchase of machinery, plant, implements, utensils or articles is granted a tax allowance for the following:
- Farming- assets owned or acquired and brought into use for the first time.
- Production of biofuels- assets owned or acquired, for the purpose of trade, brought into use for the first time for the production of bio-diesel or bio-ethanol.
- Generation of electricity- assets brought into use for the generation of electricity from wind, sunlight, gravitational water forces and biomass.
For more information visit: Taxation in South Africa Guide
Environmental Incentives
Environmental expenditure
Tax allowance for environmental expenditure is granted for the following:
- Environmental treatment and recycling asset
- Environmental waste disposal asset
- Post-trade environmental expenses
Environmental maintenance expenditure
A tax allowance for expenditure incurred to conserve or maintain land is granted under the terms of the National Environment Management: Biodiversity Act 10 of 2004.
For more information visit: Taxation in South Africa Guide
Green Tourism Incentive Programme
The Green Tourism Incentive Programme (GTIP) is an initiative of the National Department of Tourism with a key objective of encouraging privately-owned tourism enterprises to move towards cleaner and renewable energy sources and the efficient utilization of water. Managed by the IDC, financial assistance under the GTIP is provided in the form of a grant of up to R1 million to qualifying small and micro tourism enterprises.
For more information, click here. Applications open until 30 November 2018.
Integrated Demand Management (IDM) programme - energy rebate
11D Scientific and Technological R&D Tax Incentive
Green Energy efficiency fund - IDC
12K CDM Tax Incentive - SARS
12B RE Depreciation Incentive
