South Africa: Two birds with one sunbeam – ESG windfall with the expanded renewable energy tax incentive
By Tsanga Mukumba, Associate, and Jordan Moonsamy, Candidate Attorney, and overseen by Kieran Whyte, Partner, Head of Projects, and Virusha Subban, Partner, Head of Tax, Johannesburg.
The introduction of an augmented and accelerated capital expenditure deduction for the cost of constructing renewable energy infrastructure in South Africa is a boon for companies that have not yet reached their Environmental, Social and Governance (ESG) goals. It provides the opportunity to undertake reportable ESG initiatives and simultaneously enjoy a reduction in tax costs. Fully leveraging this opportunity will require a comprehensive understanding of the mechanics of amended incentives and the dynamics of ESG reporting.
In the 2023 Budget Speech, the South African Minister of Finance, as part of the ...