Government is proposing to extend the Research & Development (R&D) tax incentive beyond 31 December 2023 – likely for a period of 10 years following a consultation process with industry stakeholders, said the National Treasury.
However, it said in a statement on Friday, “given the experience gained in adjudicating applications and the review conducted, government is of the view that the R&D tax incentive requires some refinement”.
“It is the only policy instrument targeted at encouraging the earlier phases of R&D. The proposed refinements to section 11D of the Income Tax Act will move the incentive closer to its intended objectives,” said Treasury.
The 2021 Budget Review stated that government would review the research and development tax incentive.
A discussion document titled “Reviewing the design, implementation and impact of South Africa’s Research and Development Tax Incentive” was jointly published by the National Treasury and the Department of Science and Innovation for public comment on 15 December 2021.
The discussion document included a link to an online survey. In the 2022 Budget Review, Treasury announced that the R&D tax incentive will be extended until 31 December 2023 to allow the review of the incentive to be finalised as there was insufficient time to hold a public consultation between publishing the discussion document and the 2022 Budget.
In this regard, the Treasury said responses to the survey were received from 74 interested parties, some of which provided additional