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Commercial vehicle incentive guidelines approved

12th December 2014

By: Leandi Kolver

Creamer Media Deputy Editor

  

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Trade and Industry Minister Dr Rob Davies has approved the new Medium and Heavy Commercial Vehicles – Automotive Investment Scheme (MHCV-AIS) guidelines aimed at stimulating investment into the production of these vehicles in South Africa.

The MHCV-AIS, which was a subcom-ponent of the Automotive Investment Scheme (AIS), would be made available to investment projects that had a production start date from April 1, 2014, onwards, with the commis-sioning period not having exceeded 18 months prior to the start of production.

“The broadening of the scope of the AIS to include MHCV manufacturers is in line with the broader objectives of the AIS programme, as well as Vision 2020. “The MHCV sector value chains are highly underdeveloped and there are opportunities to deepen their value addition and potential for employment creation,” Davies says.

He adds that the extension of the AIS pro-gramme to these manufacturers is required to achieve certain developmental objectives, including an increasing market size and investment, deepening supply chains and inreasing technology transfer, and creating and sustaining jobs in the automotive sector.

The Department of Trade and Industry explains that the MHCV-AIS provides a nontaxable cash grant of 20% of the value of qualifying investment in productive assets by MHCV manufacturers and 25% of the value of qualifying investment in productive assets by components manufacturers and tooling companies for MHCVs as approved by the department.

An additional nontaxable grant of 5% of the value of qualifying investments in pro- ductive assets could also be available to pro- jects that meet two of the following economic benefit criteria: tooling, research and devel- opment in South Africa, employment creation, strengthening the automotive supply chain, value addition and empowerment.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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