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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 incentive offers support for both capital investment and training.

NOTE: The window period for applications under this programme has been extended from 31 December 2015 to 31 December 2017 (2 years).


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.

Investment Allowance:

  • R900 million in the case of any Greenfield project with preferred status or;
  • R550 million in the case of any other Greenfield project (qualifying status) or;
  • R550 million in the case of any Brownfield project with preferred status or;
  • R350 million in the case of any other Brownfield project (qualifying status);

Training Allowance:

  • An additional training allowance of R36 000 per full time 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 4 (four) of the total 8 points, and  'preferred status' if it achieves at least 7 (seven) of the total 8 points.

Section 12I Tax Allowance Supported Projects

Since the Section 121 Tax Allowance Incentive was announced in 2010 the programme has supported 50 projects with a total investment of R46 billion for the period up to 28 February 2015. These projects are within the priority sectors identified in the Industrial Policy Action Plan (IPAP).

The top three sectors that attracted the highest investment are as follows: 21 of the projects are in the chemical sector; seven within the cement and ceramics sector and three are in the agro-processing sector. These three sectors represent approximately 80% of the total investment approved in eight sectors. All 50 projects will create approximately 6 200 direct jobs and 65 000 indirect jobs. It is further estimated that R11 billion worth of opportunities will be created through small medium and micro enterprise procurement.

Targeted Beneficiaries

The investment must be:

  • Greenfield project (new project) . A minimum investment in Qualifying Assets of R50 million is required; or
  • Brownfield project (expansion or upgrade). A minimum additional investment in Qualifying Assets of R30 million is required; and
  • Classified under 'Major Division 3: Manufacturing' or SIC Edition 7, Section C: 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);
  • Provide skills development in South Africa; and
  • In the case of a Greenfield project, be located within a Special Economic Zone (SEZ).


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


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