The SEZ incentive package, explained in four lines
Tax, buildings, customs, jobs. Four levers, each with a statute behind it — and what each is actually worth to an investor.
Every Special Economic Zone pitch eventually reduces to four numbers. Strip away the brochure language and the South African SEZ package is a lower tax rate, a faster building write-off, relief on imported inputs, and a wage subsidy. Here is each, in one line, with the law it rests on.
One · a 15 percent tax rate
A qualifying company inside an SEZ pays corporate income tax at 15 percent under Section 12R of the Income Tax Act, against the standard 27. On R100 million of taxable income that is a R12 million annual difference — capital that stays in the business rather than leaving it.
Two · a 10 percent building allowance
Qualifying buildings depreciate at 10 percent per annum, writing the full cost off over a decade. For capital-heavy manufacturing, that accelerates the point at which a plant is carried at a fraction of its build cost.
Three · a customs-controlled area
Inside the designated customs-controlled area, imported inputs used for export production receive duty and VAT relief. For an exporter, that removes a working-capital drag on every container of raw material.
Four · the employment tax incentive
The ETI, a wage subsidy for qualifying employees, can apply on top of the SEZ measures. It rewards exactly what these zones are built to produce: jobs.
None of these are Eudo Media's invention, and none are guaranteed to any given company — each carries qualifying conditions, and tax law changes. What Eudo Media does is publish the source basis so an investor can verify every figure before relying on it.
Sources
- Income Tax Act, Section 12R and Section 12S
- Special Economic Zones Act 16 of 2014
- Employment Tax Incentive Act
- SARS guidance on SEZ tax treatment