The Coega Development Corporation (CDC) acknowledges the Finance Minister Pravin Gordhan’s announcement and comments on the Special Economic Zones (SEZ) incentives – and welcomes any incentives put in place to benefit business, industry and South Africa as a whole.
Gordhan announced a R2.9-billion tax incentive for special economic zones will be introduced to encourage business to set up their enterprises in these zones. Firms in these zones will enjoy a 15% corporate income tax rate and will also benefit from an employment incentive which Treasury plans to introduce and which will allow a tax deduction for employment of workers earning less than R60 000 per year.
“It was always the plan of the Department of Trade and Industry (DTI) to implement monetary incentives – largely in response to long standing pleas from regional Industrial Development Zones (IDZs). As the CDC, we are pleased to note that the government is embarking on a path to have government support mechanisms in place that will assist in the quest to enhance investor uptake,” says Ayanda Vilakazi, CDC spokesperson.
The CDC has been aware of the discussions and part of the consultation process on SEZs for over two years now and there have long been indications that point in the direction of fiscal incentives. At the moment, the CDC continues to manage the Coega IDZ as an IDZ. It is the intention of the CDC to comply with policy mandates and should that mandate include the migration of the Coega IDZ into an SEZ, the CDC will submit to the policy directive.
Once the regulations have been finalised, the details on migration will become clearer and in that case, the announcement of fiscal, tax and employment incentives will directly impact the Coega IDZ and Nelson Mandela Bay Logistics Park (NMBLP).
“The incentives are directed at companies and investors who locate in the new SEZs – and the CDC is part of a national SEZ implementation team which are working on the details of how the transition will take place,” Vilakazi concluded.
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The Coega Development Corporation (CDC)
