Friday August 31 is a key deadline for potential beneficiaries of government’s R5.8-billion Manufacturing Competitiveness Enhancement Programme (MCEP) to submit their applications.
The incentive scheme, which was unveiled in the February Budget, was officially launched in May and the Department of Trade and Industry (DTI) began accepting applications from June 4.
The objective of the incentive is to promote enterprise competitiveness and job retention through a ‘production incentive’ and ‘industrial financing loan facilities’, both of which have various subcomponents.
Under the scheme, investments are generally only considered if applicants complete their submissions at least 60 calendar days prior to commencement, or commercial use, of the qualifying assets.
But the DTI has moved to accommodate capital investments and green technology upgrading initiatives that began producing between May 30, 2012 and July 30, 2012 – both components fall under transitional provisions established for the production incentive aspect of the scheme.
In these instances, the 60-day rule has been waived, but applicants need to make their submission before the end of the month, as from September 1, the MCEP will revert to its normal timeline for submission.
Cova Advisory & Associates MD Duane Newman says it is “crucial that companies review their costs incurred between May 30 and July 30 to see if they could qualify for the incentive”.
Through the capital investment component, the incentive offers a cost-sharing grant of between 30% and 50% of the investment value, up to a maximum of R50-million.
Under the green technology and resource efficiency incentive a cost-sharing grant of between 30% and 50% of the investment is available, payable on production up to a maximum of R50-million.
Newman suggests that those companies that believe they stand a chance of qualifying should either contact the DTI directly, or contact a consultant associated with the Incentives Consultants Association.