In South Africa, the Section 12L tax incentive provides a tax allowance of 95c/kWh of energy saved. By applying the calorific value conversation for diesel (a common fuel for trucks), this means the tax allowance is at R9.50/litre of fuel saved through energy efficiency.
1 liter of diesel (and most fuels) saved is equivalent to 10 kWh of energy saved, which is eligible for a tax allowance of R9.50
A simple example is a logistics company that upgrades its fleet with new vehicles, leading to an energy saving of 1 million litres for 1 financial year. This is equivalent to a saving of 10 million kWh, which is eligible for a tax allowance of R9.5 million, which equates to an after tax saving of R2.66 million. In raw terms this means that logistics company can purchase 2 new trucks from the savings. As is evident, the Section 12L tax allowance can be lucrative and a good reward for implementing energy efficiency.
I have assisted companies claim more than R400 million under the Section 12L tax incentive. For more information on the Section 12L energy efficiency tax incentive for any industry and how to claim it, feel free to contact me.
Zadok Olinga, Cell: +27813129821, Email: zadok@oelinga.com
You can find the author on LinkedIn at https://www.linkedin.com/in/zadokolinga/
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