Gauteng Business 2016 edition

SPECIAL FEATURE the

SPECIAL FEATURE the development of rail transportation infrastructure. Environmental Expenditure Deductions and Allowances Expenditures on a range of environmentally friendly equipment also qualify for tax incentives. For instance, expenditure on environmental treatment, recycling assets and environmental waste disposal assets that are supplemental to a particular manufacturing process is eligible for a tax deduction of between 5 and 40 percent per annum. Carbon Reducing Changes A tax exemption is available for companies whose revenues are derived from primary Certified Emission Reductions. It is applicable for all revenues received in respect of disposal on or after 11 February 2009. Research and Development Incentives The Support Programme for Industrial Innovation (SPII) provides financial assistance to all manufacturing or software development enterprises that are registered in South Africa and engage in the development of innovative, competitive products and/or processes that promote technology development in the country. Enterprise Development Incentives • Grants – Critical Infrastructure Programme: Through the Critical Infrastructure Programme, cash grants amounting to between 10 and 30 percent of infrastructure development costs are available for new or expanding enterprises that invest in infrastructure such as roads, railways, electricity transmission and distribution, water pipelines, telecommunication networks and sewage systems. • Grants – Local Economic Development Programme Through the Local Economic Development Programme, grants of up to 70 percent are available for projects that create an enabling environment for investment in key areas. This is seen as critical to the development of markets that facilitate linkages between established and emerging sectors in these areas. • Grants – Business Process Service Sector In order to attract investment into the Business Process Service sector, grants of up to R112 000 per offshore job created, and an additional bonus structure is available to local and foreign investors that create jobs in South Africa to serve offshore clients. • Tax Exemptions – Manufacturing Investment Programme In order to stimulate local and foreign capital investment in productive qualifying assets and manufacturing, a tax-exempt reimbursable cash grant is available through the Manufacturing Investment Programme for investors in new or expansion projects in the South African manufacturing sector. • Grants – Foreign Investment Grant The Foreign Investment Grant is designed to encourage foreign businesses to invest in manufacturing companies in South Africa by assisting in the cost of transporting productive qualifying assets to the country. • Tax Exemptions – Local and Foreign Direct Investment in Industrial Policy Projects A tax incentive – in the form of an additional tax allowance – is available to promote local and foreign direct investment in industrial policy projects in South Africa. The additional tax allowance is provided for up to 55 percent of the cost of any manufacturing asset used in a qualifying industrial policy project and allocated preferred status (the allowance is 35 percent for other projects). • Grants – Tourism Enterprise Support Programme (TEP) The TEP assists large operators, investors, SMMEs and historically dis- GAUTENG BUSINESS 2016 44

SPECIAL FEATURE advantaged entrepreneurs and enterprises in obtaining the requisite professional services such as ISO/SABS quality certification, debt and equity finance, proper business planning, packaging, legal advice, technology needs and marketing. • Grants – Co-operative Incentive Scheme (CIS) Cost-sharing grants are provided through the CIS to co-operative enterprises with a view to enhancing the competitiveness and viability of these enterprises. The CIS programme provides matching grants of 90 percent (up to a maximum of R300 000) for costs related to business development. • Grants – Small Enterprise Development Agency (SEDA) Technology Programme (STP) The STP offers a range of services and financial assistance to small enterprises, particularly those operating in the informal sector. Export Incentives • Grants – Emerging Exporters Development Programme The Emerging Exporters Development Programme offers financial support to export councils, industry associations, provincial investment promotion and economic development agencies, business chambers, and SEDA with a view to assisting these organisations to promote the development of emerging exporters. • Grants – Capital Projects Feasibility Programme The Capital Projects Feasibility Programme provides grants to South African registered companies to undertake feasibility studies. The value of the grants range between R100 000 and R5-million; and, in the case of feasibility studies for projects outside of Africa, grants are capped at a maximum of 55 percent of the total cost of the study. • Rebates – Imported goods, raw materials and components used in the manufacture or processing of goods for export Tax Exemptions – Limiting the VAT registration and administrative burden faced by non-residents VAT exemptions are available through licensed customs and excise storage warehouses in South Africa in order to limit the VAT registration and administrative burden faced by non-residents. • Export Incentives – Industry-specific The primary objective of the Clothing and Textile Competitiveness Improvement Programme (CTCIP) is to build capacity in manufacturing and in other areas of the apparel value chain in South Africa. The incentives are provided in the form of a matching grant of 75 percent of project costs on cluster projects and 65 percent of project costs for company level projects. Industrial Financing Finance is available through the Industrial Development Corporation (IDC) at a competitive risk-relative interest rate to promote the establishment of permanent infrastructure Equity funding amounting to between R1-million and R30-million per project (with maximum firstround funding of R15-million and the right, but not obligation, to provide follow-on funding up to maximum of R30-million). Municipal Incentives Certain municipalities within Gauteng provide additional incentives that are specific to the municipal area. In this respect, location-specific incentives are available in both the City of Tshwane and the City of Johannesburg metropolitan municipalities. 45 GAUTENG BUSINESS 2016