National Treasury and SARS are calling on the public to comment on the draft legislative amendments that will give effect to the two renewable energy tax incentives.
This follows finance minister Enoch Godongwana’s 2023 budget announcement that individuals who install rooftop solar panels will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000. The rooftop solar tax incentive will be available for one year.
Businesses will be able to claim a 125% tax deduction (in the first year) for qualifying capital expenditure in respect of all renewable energy projects, with no threshold on generation capacity.
The business tax 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.
Godongwana’s announcement came as South Africans and local businesses are increasingly investing in alternative energy sources, such as solar, in a bid to beat the load-shedding woes.
In a statement, Treasury says the initial 2023 draft Taxation Laws Amendment Bill (TLAB) covers the two specific tax amendments, and is urgent, due to the proposed early effective dates for implementation.
It’s also aimed at enhancing certainty for individuals and businesses that would like to immediately invest in renewable energy.
Says Treasury: “The publication of the initial batch of the 2023 draft TLAB enables an early, and additional, public comment process that will enable the more detailed second round process of public comment when these provisions are incorporated in the more comprehensive 2023 draft TLAB in July 2023.
“This initial batch of the 2023 draft TLAB is intended to solicit comments on the two specific and urgent amendments and serves as notice to taxpayers for earlier effective dates of the proposed amendments.”
Comments must be in writing and may include proposals by body corporates on how the rooftop solar incentive could be applied to members of the body corporate, if a body corporate were to install solar PV panels for members’ benefit.
These must be forwarded to the National Treasury’s tax policy depository to: 2022AnnexCProp@treasury.gov.za and acollins@sars.gov.za by the close of business on 15 May.
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