BUDGET 2003
Measures to boost investment
26 February 2003
Besides giving priority to poverty alleviation, increased spending on social grants and generous tax relief, several proposals have been set out in this year's Budget aimed at encouraging business investment.
One such proposal is that taxpayers will be allowed to claim losses from ordinary revenue on the sale of devalued depreciable business assets with short economic lives.
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Delivering his Budget speech in
Parliament on Wednesday, Finance Minister Trevor Manuel said the accelerated depreciation arrangements for manufacturing assets, introduced as a temporary measure, would be retained as a fixed element of tax policy.
"In keeping with practice in many other jurisdictions, relief will be provided where business asset sale proceeds are reinvested within 18 months," he said.
Furthermore, an accelerated four-year write-off period is proposed for capital expenditure relating to research and development in the field of natural and applied sciences.
A double deduction is also proposed for the first R20 000 of costs incurred in the start-up of new businesses.
Finally, the turnover limit for small businesses qualifying for a lower company tax rate will be increased from the current R3-million to R5-million.
"These general business tax stimulus measures will be effective from the date promulgated into law and will cost approximately R80-million in 2003/04",
Manuel said.
Source: BuaNews
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