Government is looking at developing a simplified, streamlined process for the private sector to easily access the Research and Development (R&D) Tax Incentive based on a recommendation by government and industry task team.
The R&D task team – established by Science and Technology Minister, Naledi Pandor, earlier this year – has completed its report, pointing out that business-sector R&D investment needs to increase if South Africa is to enhance its competitiveness and growth potential through industrialisation.
“The R&D tax incentive is one way to achieve this objective,” said task team leader, professor Anastassios Pouris of the University of Pretoria. The team comprised representatives of R&D-performing companies from various sectors, consulting firms, industry associations, relevant government departments and agencies, academics and the policy research community.
He commented that the rationale for government support for private sector R&D, through the tax-based incentives, is still as relevant today as it was when the 150% R&D tax deduction was introduced in 2006.
“This type of support from government is necessary, given the high costs and levels of uncertainty associated with R&D,” said Pouris.
According to Pandor, the government-industry task team report will help reposition the R&D tax incentive as a key instrument for stimulating private-sector R&D investment.
