Positive reaction to extension of tax support project
03 August 2015
Posted by: Author: Amanda Visser
Author: Amanda Visser (Moneyweb)
‘The cupboard will be bare long before the scheme expires’ – Duane Newman.
The tax incentive to support investment in manufacturing assets has been extended for another two years until the end of 2017.
However, it seems as if the extension has only been granted to assist existing beneficiaries to comply with the highly complicated requirements set out in the Industrial Policy Project (IPP).
Duane Newman, head of the SA Institute of Tax Professional’s tax incentive committee, says no additional budget has been allocated for the extension.
"This means the cupboard will be bare long before the scheme expires …. A fixed budget of R20 billion was earmarked for the incentive, and the current big challenge is that most of this has already been allocated.”
This means the extension is simply academic at this point, says Newman.
National Treasury says in the explanatory memorandum on the Draft Taxation Laws Amendment Bill (TLAB) there seems to be uncertainty regarding the timeframes with respect to compliance with all the requirements of the tax incentive.
According to Treasury it is compulsory to comply annually with all the qualifying criteria of Section 121 of the Income Tax Act. However, it is evident that few, if any of the projects are able to comply with all the criteria in every year of assessment.
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This article first appeared on moneyweb.co.za.