Policy speeds up moves to a greener future
Runaway climate change remains a perennial risk, and it is therefore critical that more is done to shift the dial and make the world healthier, cleaner and greener.
Fortunately, tax policy in SA is helping accelerate this change.
Section 12B of the Income Tax Act No 58 of 1962 traditionally allows for a tax deduction in respect of certain qualifying assets (owned and brought into use after January 1 2016) to reduce the taxable income of the taxpayer.
These qualifying assets must have been used for purposes of trade in the generation of electricity from renewable sources. In essence, this refers to an accelerated write-off of qualifying assets used in the production of renewable energy and has been a part of our tax system for a while, though not used enough and certainly not enough to move heavy energy users off the tax grid.
It was previously set at 100% for the qualifying amount invested, but it has now been enhanced to 125% and there is also no maximum cap on the output of the solar installation.