During a high-powered BRICS Business Council delegation visit to Dube TradePort earlier this week, investors were told that qualifying companies located within Dube TradePort Special Economic Zone are now eligible to access Special Economic Zone incentives.
The announcement comes after South African Finance Minister Nhlanhla Nene, published his approval of 12R and 12S in the Government Gazette on 6 July 2018.
Work is currently underway with the development of Dube TradeZone 2, which opens up an additional 45 hectares for development within the Special Economic Zone.
Amongst the incentives that companies will be able to claim with 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, it serves to encourage businesses to invest in new facilities.
Secondly, certain companies undertaking business activities within the Special Economic 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. 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,” said Jabulani Sithole, Dube TradePort Special Economic Zone (SEZ) Programme Manager.
Since its inception, Dube TradePort Special Economic Zone has created a total of 3088 permanent jobs.
“To date Dube TradePort has secured ZAR3.2 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 going to be purpose-built for businesses in the pharmaceuticals and electronics sectors, offering common utilities to service these industries. The development will allow the organization to further target local and foreign investment,” confirms Sithole.
“With international forums like the BRICS Business Council highlighting Durban as an a trade and investment destination, our current projections point to the expanded zone attracting in excess of ZAR10 billion of private sector investment over the next five years, which will spur further job creation in the region,” concluded Sithole.