R& D Tax Incentives

**Greig Whitton** · 23-Jul-14, 11:42 AM

Originally Posted by desA

The main thing is that generally, the BBEEE/racist exclusions are not in the printed blurb sheets, but enter as implied criteria.

Having personally worked on a number of financing applications (specifically, DTI grant applications), I don't entirely agree with this. Obviously some programs have explicit B-BBEE or ownership criteria, but those that don't may request the same information to track how government financing is being allocated (since economic empowerment is an obvious national priority). However, they won't disqualify applicants for failing to meet "hidden" criteria.

Originally Posted by desA

Some others eg. R&D & IP support are blatantly racist.

Which R&D and IP support programs are you referring to?

**roryf** · 23-Jul-14, 12:47 PM

I looked at getting a manufacturing grant a few months back and it didn't pay me to take up the grant.I would have had to spend more money on getting a higher BEE score for the grant to happen,than I would have got back from the grant.

**Greig Whitton** · 23-Jul-14, 01:17 PM

Originally Posted by roryf

I looked at getting a manufacturing grant a few months back and it didn't pay me to take up the grant.I would have had to spend more money on getting a higher BEE score for the grant to happen,than I would have got back from the grant.

Which grant were you applying for? (I am aware of at least two: the Manufacturing Competitiveness Enhancement Programme and the Manufacturing Investment Programme - but neither of them have mandatory B-BBEE criteria).

**Justloadit** · 23-Jul-14, 01:44 PM

Originally Posted by Greig Whitton

Can you recall the name of the specific grant program? (many of the DTI's grants can be used for R&D purposes, and there are a number of non-DTI R&D funding programs like the SARS R&D tax incentive)

Can not recall, but we were looking for R5mil, and with the response, I simply decided to move on.

**roryf** · 23-Jul-14, 01:56 PM

Originally Posted by Greig Whitton

Which grant were you applying for? (I am aware of at least two: the Manufacturing Competitiveness Enhancement Programme and the Manufacturing Investment Programme - but neither of them have mandatory B-BBEE criteria).

MIP.I did have a long chat to the consultant from Bidvest and the outcome was that it would cost us more because of the BEE.In the end we financed the machinery ourselves.

**Greig Whitton** · 23-Jul-14, 02:40 PM

Originally Posted by roryf

MIP.I did have a long chat to the consultant from Bidvest and the outcome was that it would cost us more because of the BEE.In the end we financed the machinery ourselves.

I am very surprised to hear that since the Manufacturing Investment Programme does not have mandatory B-BBEE or black ownership requirements. The DTI does take an applicant's B-BBEE rating into consideration when evaluating and approving applications, but this is just one of many different factors. It is perfectly possible for a wholly white-owned business that is not B-BBEE compliant to have a MIP application approved.

In any event, the DTI has suspended MIP due to over-subscription, so that particular grant is no longer available. However, if you would ever like a second opinion about other grants and financing options, please contact me.

**Blurock** · 23-Jul-14, 04:18 PM

Originally Posted by roryf

MIP.I did have a long chat to the consultant from Bidvest and the outcome was that it would cost us more because of the BEE.In the end we financed the machinery ourselves.

Was the problem with the consultant or with DTI?

**Blurock** · 23-Jul-14, 04:23 PM

The Dept of Economic Development have budgets specific to certain provinces. As an example, in KZN there is the Local Competitiveness Fund "Gijima" available to businesses in KZN only. Other provinces have similar funds. There is no BEE requirement as the main criteria is the creation of sustainable jobs.

**Greig Whitton** · 23-Jul-14, 04:51 PM

Originally Posted by Blurock

The Dept of Economic Development have budgets specific to certain provinces. As an example, in KZN there is the Local Competitiveness Fund "Gijima" available to businesses in KZN only. Other provinces have similar funds. There is no BEE requirement as the main criteria is the creation of sustainable jobs.

Spot on. There are also privately managed business financing programs funded by corporate B-BBEE enterprise development budgets (and, ironically, mandatory B-BBEE or black ownership criteria don't always apply to these either).

The sheer scale of business financing available in this country is staggering. Well over a hundred public and private sector funds representing billions and billions of development capital. And the vast majority of it is available irrespective of race.

**Daven** · 15-Sep-14, 11:05 AM

I think I have tried all avenues at the DTI to try and acquire a small grant ( < R500,000) to finalised many years of self funded R&D in creating a range of first class LED based lighting products for both mains and solar use.
I have self funded five prototypes and now have a solution that gives me a light that is > 95% efficient irrespective of the power source.
I have spent more than R600,000 of my own money and cannot get a grant to finalise the design for SABS approval as I am a white designer.
How will SA ever get over the past and start moving forward ?
So much for government assistance to entrepreneurs.