South Africa: Implications for tax incentives in budget 2021

South Africa: Implications for tax incentives in budget

The 2021 budget speech did not feature much on incentives—especially in light of the announcement that the corporate tax rate would be reduced to 27%.

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Yet, the planned reduction in the corporate tax rate would affect existing incentives in South Africa.

The 2021 budget proposes to limit, or to allow to lapse, certain incentives.

  • Sections 12DA (Rolling stock), 12F (Airport and port assets) and 13sept (Low-cost housing on loan account): 28 February 2022
  • Section 12O (Films): 1 January 2022

National Treasury has invited stakeholders to make submissions by 31 March 2021 with support for continuing incentives beyond their respective sunset dates.

  • The venture capital company tax incentive will cease on 30 June 2021.
  • The section 13quat Urban Development Zone and section 12H Learnership Agreement tax incentives will be extended by two years (until 31 March 2023 and 31 March 2024, respectively), until the government’s effectiveness review has been completed.
  • The section 11D Research and Development tax incentive currently expires on 1 October 2022. A discussion document on the future of the incentive will be published during 2021 for public comment.

Read a February 2021 report [PDF 340 KB] prepared by the KPMG member firm in South Africa 

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