There is no medicine like hope, no incentive so great, and no tonic so powerful as expectation of something better tomorrow. So said Orison Swett Marden, but this begs the question: Would the ‘better tomorrow’ be attributable to incentives?
Speaking of incentives, do you know how many incentive programme clusters there are? A hint: these are articulated in the Department of Trade, Industry and Competition’s (DTIC’s) Guide to the DTIC Incentive Schemes 2020/21.
The DTIC’s vision is for “a dynamic industrial, globally competitive South African economy”. Its mission is to promote structural transformation towards a dynamic industrial and globally competitive economy; to provide a predictable, competitive, equitable and socially responsible environment, conducive to investment, trade and enterprise development; to broaden participation in the economy; to improve alignment between economic policies, plans of the State, its agencies, government’s political and economic objectives and mandate; to coordinate the contributions of government departments, State entities and civil society to effect economic development; and to improve the skills and capabilities of the DTIC to effectively deliver on its mandate and respond to the needs of economic citizens.
The DTIC’s strategic objectives are threefold: to grow the manufacturing sector to promote industrial development, job creation, investment and exports; to improve conditions for consumers and artists and open up markets for new patent players; and to strengthen capacity to deliver on the department’s mandate.
The DTIC says that it stimulates and facilitates the development of sustainable, competitive enterprises through the provision of incentives that support national priorities. It provides financial support for qualifying companies for various economic activities, including manufacturing, business competitiveness, export development, market access and foreign direct investment.
The department provides five incentive programme clusters, namely industrial innovation, manufacturing investment, export promotion, services investment, and infrastructure support.
The industrial innovation cluster promotes innovation and technology development, and the incentive programmes provided by the DTIC are the Support Programme for Industrial Innovation and the Technology and Human Resources for Industry Programme.
The manufacturing investment cluster encourages additional investment in manufacturing through the Automotive Investment Scheme (AIS), which includes the People-Carrier Automotive Investment Scheme and the Medium and Heavy Commercial Vehicles Automotive Investment Scheme; the Black Industrialist Scheme, which focuses on these productive sectors: the blue/ocean economy, including vessel building and repair; oil and gas; clean technology and energy; mineral beneficiation; aerospace, rail and automotive components; industrial infrastructure; information and communication technologies; agroprocessing; clothing, textiles/leather and footwear; pulp, paper and furniture; chemicals, pharmaceuticals and plastics; nuclear; manufacturing-related logistics; and designated sectors for localisation. Other programmes are the Agro-Processing Support Scheme, the Aquaculture Development Enhancement Programme, the Manufacturing Competitiveness Enhancement Programme loan facility, the Clothing and Textile Competitiveness Improvement Programme, and the Strategic Partnership Programme.
The export promotion cluster supports industrial competitiveness and consists of the Export Marketing and Investment Allowance programme, the Sector-Specific Assistance Scheme and the Capital Projects Feasibility Programme.
The services investment cluster stimulates investment in services through the Global Business Services and Film and Television Production incentive programmes.
The infrastructure support cluster leverages investment by providing infrastructure-critical industrial development and enterprise competitiveness within an industrial cluster, as well as tax benefits for relocating to geographically designated areas of South Africa set aside for targeted economic activities and supported through special arrangements and systems often different to those that apply to the rest of the country. The incentive programmes in this cluster are the Critical Infrastructure Programme and Special Economic Zone Programme.