A critical analysis of the fiscal incentives available in the renewable energy - a comparison between South Africa, India, China and Brazil

• Main Author: Hassim, Bilal
• Other Authors: West, Craig
• Format: Dissertation
• Language: English
• Published: University of Cape Town 2017
• Subjects: Taxation
• Online Access: http://hdl.handle.net/11427/25321

South Africa relies significantly on the use of non-renewable resources to generate its electricity requirements. The release of carbon dioxide and other harmful gasses during the process of electricity generation has a negative impact on the quality of human and animal health and wellbeing. The South African renewable energy sector is currently in its infancy in comparison to the global renewable energy sector. A brief analysis and comparison of the renewable energy sectors of the other countries selected in this dissertation (i.e. Brazil, China and India) will be performed to highlight the common challenges in these countries in an effort to demonstrate the relevance and importance of the tax and limited related incentives to assist in reducing these challenges and increase the use of renewable energy resources in electricity power plants. Once the relevance and importance of tax and related incentives are highlighted, this dissertation analyses and examines the specific tax incentives available to enterprises operating in the renewable energy sector in South Africa, India, China and Brazil. Based on the analysis, recommendations and/or enhancements to the current corporate tax incentives available in South Africa will be discussed in detail. This dissertation will also discuss whether any of the recommendations and/or enhancements could be incorporated into the existing South African Special Economic Zones Act. As there are 108 solar and wind energy power plant being constructed in Brazil, but no significant corporate tax incentives currently available to qualifying taxpayers, the regulatory policy setting out the renewable energy targets and how it will be achieved is an important consideration. It was found that if there were periodic updates to the regulatory policy and it was mandatory for electricity utility companies (such as Eskom) to ensure that there is a mix between renewable energy and non-renewable energy sources based on the regulatory policy, it would ensure that the delays currently being experienced in the expansion of the renewable energy sector would be significantly reduced. This dissertation found further that the accelerated capital allowances available to qualifying taxpayers in South Africa are considerably more favourable than similar accelerated capital allowances available in the other countries selected in this dissertation.