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Because of Biznews’s business partnership with Bright Light Solar, I’ve gotten a good handle on how the successful 12J venture capital tax incentive works. Apart from creating SMME jobs, the 12J scheme has kept capital in SA which would likely have been channelled offshore.
The 12J scheme allows participants to immediately write back their investment against taxable income. So in Budget lock-up yesterday I was surprised to “read” the scheme would end next month – rather than its well communicated June 2021 termination.
Except that it isn’t. I initially mistook an I for a J. Apologies to those who read our 2pm version of Budget in a Nutshell (fixed soon afterwards). The scheme to be closed next month is the lesser known 12I incentive which supports investment in new and expanding manufacturing plants. Not 12J.
Indeed, reading deeper into the Budget Review suggests 12J may well continue beyond the current mid-2021 sunset. Treasury’s document says it intends eliminating abuses which could hurt legitimate 12J players. That includes our partners whose 2020 Prospectus, incidentally, closes today.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.