Agro-Processing Support Scheme (APSS)
The Agro-Processing Support Scheme (APSS) aims to stimulate investment by the South African agro-processing / beneficiation (agri-business) enterprises. The investment should demonstrate that it will achieve some of the following:
Increased capacity, employment creation, modernised machinery and equipment, competitiveness and productivity improvement and broadening participation.
- The scheme offers a 20% to a 30% cost-sharing grant to a maximum of R20 million over a two-year investment period, with a last claim to be submitted within six months after the final approved milestone.
- the dti may consider an additional 10% grant for projects that meet all economic benefit criteria such as employment, transformation, geographic spread and local procurement.
- The maximum approved grant may be utilised on a combination of investment costs provided the applicant illustrates a sound business case for the proposed investment activities.
Links to relevant documents can be found below:
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.
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):
The Nedbank Fairshare focuses on the uptake of energy efficiency and renewable energy in business. Nedbank Fairshare offers financing for: a) outright purchases or b) third-party ownership. Nedbank assists with development of financing structures specific to client needs for purchasing of solar PV as well as third-party ownership solutions for energy users not wanting to buy systems. Solutions for financing outright purchases include term loans, asset based finance, NedBond, third-party ownership and rental discounting.
Sources of Finance for Agriculture Businesses
In January 2016 the Western Cape Government published the ’Sources of Finance for Agricultural Businesses' booklet identifying a range of finance institutions, banks, companies and agencies focusing on the agriculture sector.
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
Green Energy Efficiency Fund
The Industrial Development Corporation (IDC), through this project, supports businesses who wish to invest in energy efficiency and renewable energy technologies. Support includes loans from R1m to R50m, technical support and financial assessments. Green EE Fund
The above mentioned only applies to agro-processing.
To use the South African Sustainable Energy Finance Information Database (SASEFID) Tool, click on the link provided to take you to the required page.
ESCo Model funding programme
The ESCo Model funding programme forms part of Eskom's strategic commitment to support customers with funding and advice on how to save energy and, as a result, lower their operating costs.
For more information visit: ESCo Model funding programme
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
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
Funding for emerging farmers
Emerging Western Cape fruit farmers are set to receive R120 million in funding to boost their businesses. Alan Winde, Minister of Economic Opportunities, said 20 black deciduous fruit farmers in the province would benefit from the grant which the province secured through an application to the Jobs Fund. The goal of the fund is to support smallholder farmers to reach commercial status.
For more information, click here