The draft legislation to give effect to the two renewable energy tax incentives announced in the 2023 Budget Speech was published on 21 April 2023. These proposals carry a degree of urgency due to the proposed effective dates for implementation, to assist in partially addressing the country’s energy crisis and to enhance certainty for individuals and businesses whilst encouraging private investment in renewable energy. As a consequence of the severe energy crisis currently experienced by South Africa, and Eskom’s continued struggles to produce reliable electricity through the national grid, two renewable energy tax incentives to improve efficiency, lower the pressure on the grid and encourage greater investment in renewable energy, are proposed.
National Treasury and SARS last week published for public comment the draft regulations for tax incentives for households and businesses looking to make use of renewable energy.
The proposed new law regarding the tax credit available to individuals who install solar panels has been announced. The system will be introduced in the form of a tax credit, as opposed to a tax deduction. This is good news as it affords individuals with a uniformed opportunity in claiming the same tax credit. Under a deduction form, a sliding scale is applied, which is dependent on each individual’s income and tax bracket.