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Trade,Export and Investment Financial Assistance (Incentives)

12I Tax Allowance Incentive (12I TAI)


The 12I Tax Incentive is designed to support Greenfield investments (i.e. new industrial projects that utilise only new and unused manufacturing assets), as well as Brownfield investments (i.e. expansions or upgrades of existing industrial projects). The new incentive offers support for both capital investment and training.


The objectives of the incentive programme are to support the following:

  • Investment in manufacturing assets, to improve the productivity of the South African manufacturing sector; and
  • Training of personnel, to improve labour productivity and the skills profile of the labour force.


The incentive offers:

  • R900 million in the case of any Greenfield project with a preferred status;
  • R550 million in the case of any other Greenfield project;
  • R550 million in the case of any Brownfield project with a preferred status;
  • R350 million in the case of any other Brownfield project;
  • An additional training allowance of R36 000 per employee may be deducted from taxable income; and
  • A maximum total additional training allowance per project, amounting to R20 million, in the case of a qualifying project, and R30 million in the case of a preferred project.

According to the point system, an Industrial Policy project will achieve 'qualifying status' if it achieves at least five (5) of the total 10 points, and a 'preferred status' if it achieves at least eight (8) of the total 10 points.

Section 12I Tax Allowance Supported Projects

Since the Section 121 Tax Allowance Incentive was announced in 2010 the programme has supported 42 projects with an investment value of R43 billion for the period up to 30 April 2014. These projects are within the priority sectors identified in the Industrial Policy Action Plan (IPAP).

NOTE: The window period for applications under this programme closes on 31 December 2015.

The top three sectors that attracted the highest investment are as follow: Eighteen of the projects are in the chemical sector; six within the cement and ceramics sector, three are in the wood, paper and pulp sector. These three sectors represent approximately 83% of the total investment approved in 8 sectors. All 42 projects will create approximately 6 205 direct jobs and 89 583 indirect jobs. It is further estimated that R10,7 billion worth of opportunities will be created through small medium and micro enterprise procurement.

Targeted Beneficiaries

The investment must be:

  • Greenfield project (new project);
  • Brownfield project (expansion or upgrade); or
  • Classified under 'Major Division 3: Manufacturing'.

The project should:

  • Upgrade an industry within South Africa (via an innovative process, cleaner production technology or improved energy efficiency);
  • Provide general business linkages within South Africa;
  • Acquire goods and services from small, medium and micro-sized enterprises (SMMEs);
  • Create direct employment within South Africa;
  • Provide skills development in South Africa; and
  • In the case of a Greenfield project, be located within an Industrial Development Zone (IDZ).


Crystal Papier  +27 (12) 394 1069
Andre Potgieter  +27 (12) 394 1427


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