The South African government has offered a tax break for companies and individuals implementing solar projects as part of measures to encourage much-needed investment to boost the country’s electricity supply in the face of rolling power cuts.
Presenting South Africa’s 2023 national budget on Wednesday, Finance Minister Enoch Godongwana announced tax relief measures in billions of dollars to help struggling consumers and businesses affected by the rolling blackouts.
The measures included a tax break for solar installations, he said.
In this regard, he said government had introduced a US$500 million tax relief programme to support increased electricity supply and limit the impact of consistently high fuel prices.
“The multimillion-dollar tax relief programme is in support of South Africa’s clean energy transition, increase electricity supply and limit the impact of consistently high fuel prices,” Godongwana said.
South Africa has experienced severe power shortages over the past few years, a development that has impacted heavily on Africa’s most industrialised economy – costing it billions of dollars in lost production.
Godongwana also announced that South Africa is expected to collect US$88.9 billion in tax revenues in the 2022/23 fiscal year, a development he attributed to the government’s “sound management and higher compliance” by the country’s taxpayers – individuals and companies alike.
Godongwana said this figure would surpass the 2022 budget estimates by US$5.21 billion.
The minister said due to this positive news there would be no major tax proposals – except that of sin tax to involve alcohol and tobacco products.
“Our country is reaping the benefits of a more efficient and effective tax administration that is building trust to increase voluntary compliance and boost revenue collection,” Godongwana said.
He added: “In addition to the tax measures, I’ve announced the promotion of investments in the renewable energy. And the general fuel and Road Accident Fund levy will not be increased this year,” he said.
NM/jn/APA