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South Africa Considers Research Credit Improvements

by Lorys Charalambous, Tax-News.com, Cyprus

05 July 2016


South Africa's Department of Science and Technology (DST) has begun considering recommendations on how to improve research and development tax incentives.

A report prepared by the Government with input from industry says that government support for R&D through the 150 percent tax deduction "is still as relevant now as it was when it was introduced in 2006."

However, it added that "business-sector R&D investment needs to increase if South Africa is to enhance its competitiveness and growth potential. The R&D tax incentive is one of a portfolio of policy instruments to help achieve this objective."

One of the report's key finding was that the Government should develop a simplified, streamlined process for companies to access the R&D tax incentive.

The report said a retrospective method, which would allow companies to submit detailed information on their R&D undertaken at year-end, could significantly improve the accessibility of the incentive. DST has initiated consultations with the South African National Treasury to look at the feasibility of this recommendation.

The report also highlighted the impact of administrative delays and backlogs at the South African Revenue Service.

TAGS: South Africa | tax | investment | business | tax authority | small and medium-sized enterprises (SME) | tax breaks | research and development | Africa

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