Published 13 May 15 By: Terence Creamer - Creamer Media Editor

Duane Daws

The Department of Trade and Industry (DTI) has published a notice of changes to its flagship incentive, the Manufacturing Competitiveness Enhancement Programme (MCEP).

In a note on its website, the department indicated that, as from May 11, 2015, new applications with an investment value of R50-million and above, would no longer be considered under the MCEP Incentive.

“Applicants with an investment value of R50-million and above are encouraged to apply for the 12I Tax Allowance Incentive,” the notice read.

Manufacturing Circle executive director Coenraad Bezuidenhout said that some of its members were likely to be affected by the change, but that it was still in the process of assessing the full implications.

He said that manufacturers generally accepted that incentives would evolve over time, but that the Manufacturing Circle was firmly of the view that the sector required nurturing through programmes such as MCEP, which were designed to raised plant-level competitiveness.

Cova Advisory director Duane Newman said reference in the notice to "new" applications was interpreted to mean that the threshold change would apply only to applications submitted after May 11.

However, he also noted that there were marked distinctions between MCEP and the 12I Tax Allowance, with the former covering multiple projects and 12I only capital costs.

Therefore, it would be important for the department to issue a fuller clarification in order for potential applicants to be in a position to plan appropriately.

The DTI did not respond immediately to Engineering News Online questions on the issue.