The National Treasury and the South African Revenue Service (SARS) today publish, for
public comment, the draft legislative amendments to give effect to the two renewable energy
tax incentives, announced in the 2023 Budget. These proposals assist in partially addressing
the country’s energy crisis, and also encourages private investment into expanding of
electricity generation.
This initial batch of the 2023 draft Taxation Laws Amendment Bill (TLAB) covers these two
specific tax amendments, and are urgent, due to the proposed early effective dates for
implementation, and to enhance certainty for individuals and businesses that would like to
immediately invest in renewable energy.
The publication of the initial batch of the 2023 draft TLAB enables an early, and additional,
public comment process, that will enable the more detailed second round process of public
comment when these provisions are incorporated in the more comprehensive the 2023 draft
TLAB in July 2023. This initial batch of the 2023 draft TLAB is intended to solicit comments
on the following two specific and urgent amendments and serves as notice to taxpayers for
earlier effective dates of the proposed amendments. Chapter 4 of the 2023 Budget Review
provided more detail on the following two proposals:
- Expansion of the renewable energy tax incentive
Under the enhanced renewable energy tax incentive, taxpayers who are conducting
businesses will be able to claim a 125 per cent tax deduction (in the first year) for
qualifying capital expenditure in respect of all renewable energy projects, with no
threshold on generation capacity. The enhanced incentive will be available for a period
of two years and apply to investments in renewable energy projects brought into use
for the first time on or after 1 March 2023 and before 1 March 2025.
- Rooftop solar tax incentive
With respect to the rooftop solar tax incentive, individuals will be able to receive a tax
rebate to the value of 25 per cent of the cost of any new and unused solar PV panels,
up to a maximum of R15 000. The rooftop solar tax incentive will be available for a
period of one year and will apply to new and unused solar PV panels that are acquired
by the individual and brought into use for the first time on or after 1 March 2023 and
before 1 March 2024.
Public comments may include proposals by body corporates on how the rooftop solar
incentive could be applied to members of the body corporate if a body corporate were to
install solar PV panels for members’ benefit.
The draft legislation and the accompanying draft explanatory memorandum containing a
comprehensive description of the proposed amendments can be found on the National
Treasury (www.treasury.gov.za) and SARS (www.sars.gov.za) websites.
Due date for public comments
National Treasury and SARS hereby invite comments in writing on the initial batch of the
2023 draft Taxation Laws Amendment Bill and draft Explanatory Memorandum. Please
forward written comments to the National Treasury’s tax policy depository at
2022AnnexCProp@treasury.gov.za and SARS at acollins@sars.gov.za by the close of
business on 15 May 2023.
Issued by National Treasury
Date: 21 April 2023
