12l Tax Sanedi

8/12/2019 12l Tax Sanedi

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12-I Tax AllowanceEnergy Efficiency TaxReview

2011/2012


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July 2010 to March 2012


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The 12-I Tax Allowance

BACKGROUND


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Objectives To support investmentin manufacturingassets,with a view to improving the productivity ofSouth Africas manufacturing sector;

and To support personnel training, with a view to

improving labour productivity and the skillsprofile of South Africas labour force.


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Key Qualification Criteria Upgrade & expand industrial development inSouth Africa. Enhance skills development. Use new, energy efficient technologies. Achieve a minimum, substantiated 10% energy-efficiency improvement.


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Energy Efficiency Component Energy efficiency is a pertinent prerequisite. Reported Savings in line with SANS 50010. Minimum 10% improvement, (Greenfields& Brownfieldsprojects are eligible). Modern, viable, energy-efficient equipment and

processes to be deployed. Energy Efficiency improvements to be verified by SANEDI.


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SANEDIs Role Confirmation of re l EE-interventions. Verify the methodology & assumptions. Monitor, report & issue annual Tax Clearance

Certificates.

all in accordance withSANS 50010.


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THE PROCESS12-I Tax Allowance Process


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1

2

1E

2E

3E

34

4E

5

Company decides toexpand or upgradeand utilise the taxallowance

Confirm feasibility and high-levelcompliance with qualifyingcriteria

Submit application &all supportingdocumentation forevaluation to the dti

Accepts & reviewsapplication, conductssite visit & compilesan evaluation report

Adjudicationcommittee review andsubmit report andrecommendation tothe Minister, (the dti)

PROCESS


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67

8

9

5E

6E

7E

Communicateadjudication result(inform client, provide SARS with list of approvedallowances and publish list of adjudicatedprojects in Government Gazette)

Implementation of approvedprojects & close-out report

PROCESS, ont


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8

9

5E

6E

7E

Annual monitoring ofproject during 4-yearbenefit period

Annual reportingsubmitted to

Parliament andAuditor General

PROCESS, contdTotally transparent process


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1

2

1E

2E

3E

34

4E

5

1E. Appoint SANASaccredited CMVP* toestablish baseline

2E. Submit baseline report forevaluation to SANEDI and the dti

3E. Baseline reportsubmitted to SANEDItechnical committee forevaluation

4E. If approved,receive certificate &two provisional points,(dependent onverified performance)

EE SUB-PROCESS


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8

9

5E

6E

7E

5E. CMVP completes & submitsM&V report to SANEDI. SANEDIreviews the data & issues acertificate on approval

6E. Company submits certificatewith annual tax return

7E. Sustained savings over 4 years withannual M&V reports

EE SUB-PROCESS, ont


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PERFORMANCE12-I Tax Allowance Assessment


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HIGHLIGHTS 12-I)

Note: July 2010 to March 2012


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Application Project Types


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Geographic Distribution


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Industry Sectors Represented


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Industry Sectors Representedont


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Application Technologies


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LESSONS LEARNT


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WAY FORWARD


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The tax allowance will remain available to the South African manufacturingsector until 2015 or until the available funds have been fully allocated,whichever comes first. Findings and lessons from this initial phase of 12-I has served to inform thedevelopment of supporting processes that will be required by theupcoming12-L energy efficiency tax incentives. In future, SANEDI is expected to report fully on verified savings achieved by

the respective efficiency upgrades and developments as they arecommissioned and to be able to quantify the national benefits resultingfrom the tax allowance. Over the 4-year period relevant to each of the respective projects, SANEDImust still compile a view on the sustainability of energy savings resulting

from different type of interventions. These findings will be available toeffectively serve decision-making regarding energy efficiency interventionsand technical support, among the services offered by SANEDI.


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Conclusion Tax regimes are a globally popular mechanism to theaccelerate the uptake of energy efficiency. The ring-fencing of the proposed Carbon Tax for re-investment in EE is a positive step forward. 12-I is an excellent starting point & 12-L will open up themarket. The (energy) bottom-line: The expected efficiencyimprovement was as high as 40%& an average efficiencygain of 18%is expected across all 14 projects


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Documents

12l Tax Sanedi