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MANUFACTURING GRANTS
TOURISM GRANTS
MANUFACTURING
GRANTS
The DTI introduced the SMEDP on 6 September 2000, effective 1 September
2000. This programme replaces the previous Industrial Development Programmes,
which terminated in October 2000, has a significantly higher investment
ceiling of R100m and attracts exceedingly Lucrative Cash Based Tax Free
benefits. It is not restricted to manufacturing and in addition accommodates
not only new but also expanding projects.
Applicability
Enterprises investing in capital in a:
- New project or
- Expansion of an existing operation
Benefit
Establishment Grant:
- 3 yrs cash incentive on qualifying asset
(The 3rd year is subject to attaining a Human Resource remuneration ratio
expressed in terms of manufacturing cost of at least 30%.)
- Qualifying assets are defined as:
| Qualifying
Assets |
Ownership |
Valuation |
| Machinery
and Equipment |
Owned
or fin lease |
Cost |
| Commercial
Vehicles (excluding Double cabs & 4x4s) |
Owned
or fin lease |
Cost |
| Land
& Buildings |
Owned |
Cost |
| Land
& Buildings |
Rented |
Capitalised
annual rent * |
*Rental
is capitalised at 15%, but subject to market valuation or related party
cost
Non-qualifying
assets include:
- Farm or smallholding (land)
- Residential Land & Buildings (unless entirely used for manufacturing)
- Assets that have Previously received incentives
- Rented assets (not capitalised in financials)
- Capital work in progress
- Office equipment
The incentive is calculated on a sliding scale of benefit based on the
level of investment in qualifying assets:
| Level
of Investment in Qualifying assets |
Sliding
scale % of benefit |
Maximum
potential incentive |
Max
cumulative potential incentive |
| below
R 5m |
10%
p.a. |
R
500 K |
R
500 K p.a. |
| next
R 10m |
6%
p.a. |
R
600 K |
R
1,1m p.a. |
| next
R 15m |
4%
p.a. |
R
600 K |
R
1,7m p.a. |
| next
R 20m |
3%
p.a. |
R
600 K |
R
2,3m p.a. |
| next
R 25m |
2%
p.a. |
R
500 K |
R
2,8m p.a. |
| next
R 25m |
1%
p.a. |
R
250 K |
R
3,05m p.a. |
Other
qualifying Criteria
Equity requirements
All projects are to meet an equity requirement:
- 10% equity: up to R 5 million
- 25% equity: from R 5 to 100 million
Qualifying entities
- Qualifying: All incorporated entities, (CC, (Pty) Ltd, Ltd, Co-op's,
Sole proprietor, Partnership)
- Non- Qualifying: Trusts, profit centres, branches, divisions
Expansions
- Only one expansion per entity will be considered
- Must demonstrate a 35% increase in Plant & Machinery at cost by the
end of the first full year.
- Substantial increase (discretionary) in turnover over base year of which:
- No reduction in employment must result from the expansion
Method
of Payment of the Asset based incentive
The incentive is cash based and may be claimed quarterly or annually in
arrears
Tax
Status
The incentive income is exempt from Income Tax.
Applications
Applications comprise of a general application, a detailed project evaluation
and a business plan and must be lodged as follows:
New Project
No later than 180 days after date of commencement of production.
Expansions
Must be submitted prior to the proposed commencement date of production.
Other
Sectors
Other Industry Sectors listed as Qualifying Activities include :
- Agricultural projects & Agro Processing
- Aqua Culture
- Bio Technology
- Business Services
- Culture Industry
- Information and Communications Technology
- Recycling
- Tourism
governementgrants.co.za
's Role
It has been our experience that many businesses have forgone certain incentives
due to a lack of marketing information on the various incentive schemes
and a shortage of time to devote on the subject.
We
focus on assisting clients to maximise benefits available in terms of
various government incentives, such as The SMEDP Programme, Foreign Investment
Grants, The Competitiveness Fund and Export Development through EMIA &
ITMAS. We focus on all these and other incentives schemes.
We
work on a performance-based fee structure,
thus placing the onus on us to obtain the most lucrative incentive package
for your business.
CLICK
HERE TO GET IN TOUCH
TOURISM
GRANTS
The DTI introduced the SMEDP on 6 September 2000, effective 1 September
2000. This programme replaces the previous Industrial Development Programmes,
which terminated in October 2000, has a significantly higher investment
ceiling of R100m and attracts exceedingly Lucrative Cash Based Tax Free
benefits. It is not restricted to manufacturing and in addition accommodates
not only new but also expanding projects.
Applicability
Enterprises investing in capital in a:
- New project or
- Expansion of an existing operation
Tourism
includes:
- Short term accommodation eg. Hotels, Lodges and Guesthouses (Restaurants
and Conference centres can also qualify if part of a short-term accommodation
facility)
- Tour operators
- Funicular railways, private railways and aerial cableways.
- Water transport vehicles exclusively used for tourists on dams, lakes,
down rivers, in harbours and to islands along the South African coastline.
Benefit
Establishment Grant:
- 3 yrs cash incentive on qualifying asset
(The 3rd year is subject to attaining a Human Resource remuneration ratio
expressed in terms of manufacturing cost of at least 30%.)
- Qualifying assets are defined as:
| Qualifying
Assets |
Ownership |
Valuation |
| Furniture
and Equipment |
Owned
or fin lease |
Cost |
| Vehicales
for transportation of tourists |
Owned
or fin lease |
Cost |
| Buildings |
Owned |
Cost |
| Buildings |
Rented |
Capitalised
annual rent * |
*Rental
is capitalised at 15%, but subject to market valuation or related party
cost
Non-qualifying
assets include:
- Farm or smallholding (land)
- Residential Land & Buildings (unless entirely used for manufacturing)
- Assets that have Previously received incentives
- Rented assets (not capitalised in financials)
- Capital work in progress
- Office equipment, linen, crockery, cutlery, art, uniforms, utensils
The incentive is calculated on a sliding scale of benefit based on the
level of investment in qualifying assets:
| Level
of Investment in Qualifying assets |
Sliding
scale % of benefit |
Maximum
potential incentive |
Max
cumulative potential incentive |
| below
R 5m |
10%
p.a. |
R
500 K |
R
500 K p.a. |
| next
R 10m |
6%
p.a. |
R
600 K |
R
1,1m p.a. |
| next
R 15m |
4%
p.a. |
R
600 K |
R
1,7m p.a. |
| next
R 20m |
3%
p.a. |
R
600 K |
R
2,3m p.a. |
| next
R 25m |
2%
p.a. |
R
500 K |
R
2,8m p.a. |
| next
R 25m |
1%
p.a. |
R
250 K |
R
3,05m p.a. |
Other
qualifying Criteria
Equity requirements
- 10% equity: up to R 5 million
- 25% equity: from R 5 to 100 million
Qualifying entities
- Qualifying: All incorporated entities, (CC, (Pty) Ltd, Ltd, Co-op's,
Sole proprietor, Partnership)
- Non- Qualifying: Trusts, profit centres, branches, divisions
Expansions
- Only one expansion per entity will be considered
- Must demonstrate a 35% increase in Plant & Machinery at cost by the
end of the first full year.
- Substantial increase (discretionary) in turnover over base year of which:
- No reduction in employment must result from the expansion
Method
of Payment of the Asset based incentive
The incentive is cash based and may be claimed quarterly or annually in
arrears
Tax
Status
The incentive income is exempt from Income Tax.
Applications
Applications comprise of a general application, a detailed project evaluation
and a business plan and must be lodged as follows:
New Project
No later than 180 days after date of commencement of production.
Expansions
Must be submitted prior to the proposed commencement date of production.
Other
Sectors
Other Industry Sectors listed as Qualifying Activities include :
- Agricultural projects & Agro Processing
- Aqua Culture
- Bio Technology
- Business Services
- Culture Industry
- Information and Communications Technology
- Recycling
- Manufacturing
governementgrants.co.za
's Role
It has been our experience that many businesses have forgone certain incentives
due to a lack of marketing information on the various incentive schemes
and a shortage of time to devote on the subject.
We
focus on assisting clients to maximise benefits available in terms of
various government incentives, such as The SMEDP Programme, Foreign Investment
Grants, The Competitiveness Fund and Export Development through EMIA &
ITMAS. We focus on all these and other incentives schemes.
We
work on a performance-based fee structure,
thus placing the onus on us to obtain the most lucrative incentive package
for your business.
CLICK
HERE TO GET IN TOUCH
|
