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DTI motivates reasoning for changes to manufacturing incentive

The Department of Trade and Industry (DTI) says the recent decision to limit the Manufacturing Competitiveness Enhancement Programme (MCEP) incentive to projects with an investment value of less that R50m was made to sustain the incentive amid a “deluge of applications.”

From May 11, new applications with an investment value of R50m and above, would no longer be considered for MCEP benefits. DTI also indicated that applications with an investment value above that threshold should instead apply for the 12I Tax Allowance Incentive.

Incentive Administration and Development deputy director-general Malebo Mabitje-Thompson says that over 900 competitiveness-enhancement projects have been supported under MCEP, with R5.3bn committed to date. In the last financial year over R1bn was disbursed to manufacturers that achieved agreed milestones.

The scheme has also leveraged over R19bn-worth of investment to replace outdated or energy-inefficient equipment and processes and the DTI calculates that it has helped sustain over 170,000 jobs.

“The department has opted to keep the programme open and prioritise strategic projects which will unlock capacity to exploit existing market opportunities domestically and globally, sustain and expand employment and real income growth in the long term.”

Manufacturers affected by the change should contact the department directly to establish whether their projects could be supported by 12I or other incentive schemes.



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