Incentives

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Manufacturing Competitiveness Enhancement Programme (MCEP) – Programme Suspended

The dti announced the early suspension of the MCEP in October 2015 with effect from 1 November 2015. The announcement included that a further pronouncement of the future can be expected in April 2016 from the dti.

The programme supports SA’s manufacturing industry and a variety of engineering support services with the objective to improve competitiveness and sustain employment. The cash incentive was available to existing businesses wishing to expand or improve their facilities, products or processes.  The incentive is capped as follows:

  • Capital Investment: 30 - 50% incentive, limited to a maximum of R30 million for large companies.
  • Green Technology and Resource Efficiency Improvement: 30 - 50% incentive, limited to a maximum of R20 million for large companies.
  • Enterprise-Level Competitiveness Improvement: 50 - 70% incentive, limited to a maximum of R10 million for large companies
  • Feasibility studies:  50 - 70% incentive, limited to a maximum of R8 million for large companies.

 The programme also included an application to the Industrial Development Corporation (IDC) for a working capital facility of R50 million over a four-year term, at a fixed interest rate of 4%.

Automotive Investment Scheme (AIS)

The AIS is part of the Automotive Production and Development Programme (APDP) and aims to grow and develop the automotive sector via investment in new and/or replacement of light motor vehicle models and the manufacturing of automotive components. A cash incentive of 20-35% is payable against a qualifying investment in plant and machinery, tooling, owned buildings and certain competitive improvement costs for Light Motor Vehicle (LMV) Manufacturers, Component Manufacturers and Tooling Companies.

People-Carrier Automotive Investment Scheme (P-AIS)

P-AIS is a sub-component of the AIS, designed to stimulate growth in people-carrier vehicles via investment in new and/or replacement models, with a cash incentive of 20 - 35% payable against the qualifying investment in plant and machinery, owned buildings and tooling, process and certain competitive improvement costs for People Carrier Manufacturers / Assemblers and Component Manufacturers and Tooling Companies.

Medium-Heavy Commercial Vehicle Automotive Investment Scheme (MHCV-AIS)

MHCV-AIS is a sub-component of the AIS, designed to stimulate growth in medium & heavy vehicles and buses via investment in new and/or replacement models, with a cash incentive of 20 - 35% payable against the qualifying investment in plant and machinery, owned buildings and tooling, process and certain competitive improvement costs for Medium and Commercial Vehicle Manufacturers / Assemblers, Bus Body Builders and Component Manufacturers and Tooling Companies.

Textile Production Incentive Programme (PIP)

The PIP aims to develop the clothing, textiles, footwear, leather and leather goods manufacturing sectors and is calculated at a % of the company’s Manufacturing Value Addition (MVA). The cash incentive may be used to improve competitiveness, invest in capital equipment, improve products or processes and develop skills. The % utilised against the MVA until January 2016 was 7,5 %, with a reduction in % expected when applications open in April 2016 again.

Section 12 I:  Tax Allowance Incentive (12I TAI)

The Section 12 I programme supports large-scale Greenfield investments (with a minimum investment of R50 million) and expansions or upgrades for Brownfield investments (with a minimum investment of R30 million) in manufacturing, with a maximum tax allowance of up to R900 million per project for Greenfield projects located in a Special Economic Zone (SEZ).

Aquaculture Development and Enhancement Programme (ADEP)

The ADEP offers a cash incentive of up to R40 million on investment in marine and freshwater activities such as cultivation and processing, and ancillary activities such as feed manufacturing, research and development and veterinary services. 

 

Black Industrialist Scheme (BIS)

The BIS supports manufacturing businesses with more than 50% Black shareholding and majority Black Management Control, which intends to make an investment of at least R 30 million. The programme provides assistance with:

  • Capital Investments;

  • Post-investment Support;

  • Feasibility Studies;

  • Business Development Services.

The scale of benefit is between 30% - 50% and is dependent on the percentage of Black shareholding and compliance with designated Economic Benefit Criteria.

 

Incubation Support Programme (ISP)

The ISP provides support for companies investing in the establishment or expansion of business incubators. The benefit is a cost-sharing cash incentive calculated on the operational costs of the incubator over a 2 or 3 year period. The cost-share is either 50:50 or 60:40, to a maximum of R10 million per annum, depending on the size of the incubator.