Budget reveals fresh investment incentives

Ed Richardson GOVERNMENT has announced fresh investment incentives for manufacturers. In his budget speech to Parliament, finance minister Trevor Manuel said "South Africa needs to nurture its economic growth and job creation. "In order to encourage investment in productive capacity, an accelerated depreciation allowance for a broad range of new manufacturing assets acquired within three years from 1 March 2002 is proposed. These assets will be depreciated over four years in contrast to the existing 5-year period. "Forty per cent of the cost of the asset will be deducted in the first year and twenty per cent of the cost for the subsequent three years." This measure will encourage investment and ease the impact on investing firms of the recent depreciation of the rand, says Manuel. In addition, the monetary threshold for assets acquired on or after 1 March 2002 that may be immediately written off is increased from R1 000 to R2 000.