Dube do! 15% tax rate kicks in at SEZ
30 August 2018 | Web Article Number: ME201811161
DURING a high-powered BRICS Business Council delegation visit to Dube TradePort recently, investors were told that qualifying companies located within the Special Economic Zone (SEZ) are now eligible for SEZ incentives.
This is after Finance Minister Mr. Nhlanhla Nene published his approval of 12R and 12S in the Government Gazette in July 2018.
A flurry of activity is taking place within the zone where work is currently underway with the development of Dube TradeZone 2, which opens up an additional 45 hectares for development.
Amongst the incentives that companies will be able to claim following this approval by the Finance Minister is the accelerated depreciation allowance on capital structures, which is a tax rebate on the investment a company makes in the buildings it operates from.
This tax rebate is valued at 10% of the total investment amount per annum, over 10 years, and serves to encourage businesses to invest in new facilities.
Additionally, certain companies undertaking business activities within the zone will be eligible to benefit from a reduced corporate tax rate of 15% instead of the normal 28% corporate tax rate.
"Seeing the implementation of this legislation is a significant milestone for South Africa as it serves as a support measure that will accelerate the growth of manufacturing and exports, in addition to attracting further domestic and foreign direct investment,” said Jabulani Sithole, SEZ Programme Manager.
“While improving the adoption of new technologies and skills into the market. Companies will also be entitled to claim to an Employment Tax Incentive (ETI), which encourages employers to hire the youth and other less experienced job seekers, however, the employee age restriction will not apply within Special Economic Zones which will broaden the benefit of ETI to both workers and SEZ Enterprises.”
Since its inception, Dube TradePort SEZ has created 3 088 permanent jobs. In the last year, alone businesses operating within the zone have created 432 new permanent jobs. The cumulative employment opportunities created by companies operating within Dube TradePort Special Economic Zones, when counting downstream and upstream value chain linkages now totals 12 997 indirect jobs added to the KZN economy.
“To date Dube TradePort has secured R 3.2 billion in private sector investment, building on this success, work is already underway to develop the second phase of our Dube TradeZone light industrial development that will be 45 hectares in extent.
This development is planned to be purpose-built for businesses in the pharmaceuticals and electronics sectors, offering common utilities to service these industries. The development will allow the organisation to further target local and foreign investment.
‘With international forums like the BRICS Business Council highlighting Durban as a trade and investment destination, our current projections point to the expanded zone attracting in excess of R10 billion of private sector investment over the next five years, which will spur further job creation in the region,” Sithole said.
Over the last eight years, Dube TradePort SEZ has expanded its land holdings to over 3 500 hectares around King Shaka International Airport, catering for the expansion of its development zones, which encompasses industrial, agro-processing and other commercial activities. It has opened a One Stop Shop facility to assist investors with a variety of services that range from helping investors apply for SEZ incentives, as well as other matters that are related to developing and setting up operations within the precinct, improving the ease of doing business for investors.