The Department of Trade and Industry approved more than R20-billion in industrial finance this year‚ creating 27 000 direct new jobs and about 108 000 new indirect jobs.
This emerged from a media briefing Tuesday by the economic and employment cluster of ministers chaired jointly by Rural Development and Land Reform Minister Gugile Nkwinti and Science and Technology Minister Naledi Pandor.
The department's incentive programme incorporates the automotives‚ clothing‚ critical infrastructure‚ film and business process outsourcing sectors as well as special economic zones and the manufacturing competitiveness enhancement programme.
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The incentive expenditure of the department is sometimes criticised for being a waste of money but the World Bank recently noted in an update report on SA that the country's investment tax incentives "have contained job destruction in industrial sectors" and "have encouraged additional investment in agriculture‚construction‚ manufacturing‚ trade and other services".
The job multipliers of investment in manufacturing was another strong argument in favour of the incentives.
The World Bank report also concluded that the additional investment generated by tax incentives exceeded the revenue foregone by government in granting them.
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In a briefing to parliament's trade and industry committee‚ departmental officials noted that the 2017/18 budget allocated R5.5-billion for incentives with the total for the three years of the medium-term expediture framework amounting to R16.9-billion.
Special economic zones have been allocated R605-million in 2017/18 and manufacturing development incentives R3.6-billion.
– TMG Digital/BusinessLIVE
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