• Last week Friday, the South African National Treasury and SARS called for public comment on draft legislative amendments related to two renewable energy taxation laws.
• South African citizens have until 15th May to make comments on the matters.
• Under the proposed bill, “taxpayers who are conducting businesses will be able to claim a 125 percent tax deduction” in the first year.

Much has been made of renewable energy of late given the country’s ongoing energy crisis, as well as new tax incentives that are coming into play for citizens and businesses that invest in solar.

To that end, and to gauge how South Africans are feeling on the matter, the National Treasury and SARS issued calls for public comment last week Friday, specifically regarding two renewable energy tax incentives that were announced in the 2023 Budget Speech.

“This initial batch of the 2023 draft Taxation Laws Amendment Bill (TLAB) covers these two
specific tax amendments, and are urgent, due to the proposed early effective dates for
implementation, and to enhance certainty for individuals and businesses that would like to
immediately invest in renewable energy,” explains the Treasury in an official statement.

The two matters are the expansion of the renewable energy tax incentive and the rooftop solar tax incentive.

Regarding the former, the Treasury notes that, “Under the enhanced renewable energy tax incentive, taxpayers who are conducting businesses will be able to claim a 125 per cent tax deduction (in the first year) for qualifying capital expenditure in respect of all renewable energy projects, with no threshold on generation capacity. The enhanced incentive will be available for a period of two years and apply to investments in renewable energy projects brought into use for the first time on or after 1 March 2023 and before 1 March 2025.”

As for the rooftop solar tax incentive, which we have written about previously, “Individuals will be able to receive a tax rebate to the value of 25 per cent of the cost of any new and unused solar PV panels, up to a maximum of R15 000. The rooftop solar tax incentive will be available for a period of one year and will apply to new and unused solar PV panels that are acquired by the individual and brought into use for the first time on or after 1 March 2023 and before 1 March 2024.”

Those wishing to make comments before close of business on 15th May to the National Treasury are advised to do so in writing to the following address, 2022AnnexCProp[at]treasury[dot]gov[dot]za. As for SARS, you can send you comments to acollins[at]sars[dot]gov[dot]za.

[Image – Photo by Justin Lim on Unsplash]