Tax incentive for companies to save energy
4 December 2013
The Department of Energy is introducing a tax incentive for South African companies
that make measurable savings in their energy consumption.
Briefing journalists in Johannesburg on Wednesday, the department's director-general,
Nelisiwe Magubane, announced the promulgation of regulations which will allow
Finance Minister Pravin Gordhan, in consultation with the ministers of energy and
trade and industry, to publish the tax incentive.
The incentive will contribute to energy efficiency and the reduction of South Africa's
greenhouse gas emissions, Magubane said.
He said the regulations would be published soon, and urged businesses to scale up
their energy efficiency improvement measures so as to take advantage of the
incentive.
"We're not saying [to companies], reduce your energy use by simply switching off
machines. We are saying, run your machines in an energy saving way."
Registration with
Sanedi
To benefit from the incentive, companies will have to register with the South African
National Energy Development Institute (Sanedi), which will administer the technical
component of the incentive.
Cecil Marden, chief director at the National Treasury, said the incentive would work
"on the basis of quantifiable energy that you have saved expressed as kwh [kilowatt
hours], and for each kwh that you have saved, you will get a 45 cent tax relief."
On the projected cost of the incentive to the national fiscus, Marden said: "That is
difficult to [estimate] right now ... We will rely on Sanedi, which will collate data
upfront. Once we have data from Sanedi, we will be able to quantify that."
Marden said South Africa was "a fairly energy-intensive country, and over the years
some effort has been made and energy efficiency is improving. We've made a
commitment as Treasury to support the Department of Energy to deal with energy
efficiency."
The department, the Treasury, Sanedi and the South African Revenue Service will
conduct workshops from January to March 2014 to help businesses understand the
incentive and the registration process. Information will also be made available on
www.sanedi.org.za.
Private Sector Energy Efficiency Project
The department, together with the National Business Initiative, also launched the
Private Sector Energy Efficiency Project on Wednesday.
The initiative will help companies - both commercial and industrial, large and small -
to identify energy savings measures, and has received financial support from the
British government.
This augured well for the implantation of the new tax incentive, Magubane said,
adding that the government's National Energy Efficiency Strategy set a national target
of reducing South Africa's energy intensity by 12% by 2015. The strategy had
recently
been reviewed and was ready to be submitted for Cabinet approval, he noted.
National Business Initiative CEO Joanne Yawitch said the Private Sector Energy
Efficiency Project aimed to work "with about 60 large companies and just over 1 000
medium-sized companies to support the awareness and uptake of best practice in
energy management and energy efficiency".
Yawitch said the initiative would offer remote advice for small businesses, technical
face-to-face support for medium-sized companies, and longer-term support of energy
management and strategy for large companies.
Source: SAnews.gov.za
