Latest news with #R7.2
IOL News
07-05-2025
- Business
- IOL News
South Africa considers increased import duties on renewable energy components
The Department of Trade, Industry and Competition is reviewing import duties on key components used in renewable energy projects Image: Henk Kruger/Independent Newspapers The Department of Trade, Industry and Competition is reviewing import duties on key components used in renewable energy projects as part of a broader strategy to drive local production and reduce reliance on foreign supply chains. In a government gazette published on April 17 2025, the International Trade Administration Commission (ITAC) highlighted that South Africa's domestic demand trajectory, raw material resources, technological capacity, and manufacturing expertise position the country to potentially become a major player in both regional and international renewable energy supply chains. The proposed change, as outlined by ITAC, would involve increasing customs duties on components essential for solar, wind, and battery storage technologies. These proposals have also been published for public comment. "With careful calibration, an updated tariff structure could boost demand for, and enhance the competitive supply of, locally manufactured products and components. This shift would also unlock new export market opportunities and strengthen the competitiveness of the local renewable energy value chain," ITAC noted. The National Employers Association of South Africa (Neasa) has pointed out that, if the proposed tariff increases are implemented, the duty liability on these products could rise from R371 million to R7.2 billion, based on 2024 import data. "This increase is connected not only to current capacity but also to the possible future capacity to produce locally. If implemented, this would raise the duty liability on these products from R371 million to R7.2 billion," Neasa stated.
IOL News
29-04-2025
- Business
- IOL News
Warning signs emerge as ITAC reviews tariffs for renewable energy sector
In the past year, R6.3 billion-worth of solar panels were imported. Image: Armand Hough/Independent Newspapers The renewable energy sector in South Africa faces potential upheaval as the International Trade Administration Commission (ITAC) reviews 82 tariff codes, a move which has been flagged by industry experts as having more penalties than incentives. As various stakeholders await the final review, expected by the end of the year, the implications of the proposed changes could reshape the landscape for manufacturers and importers in the renewable energy value chain. XA Global Trade Advisors CEO Donald Mackay on Friday the review looked to increase tariffs on 82 tariff codes in the renewable energy value chain, which was a really big deal. "I am not proposing for a second ITAC. It will automatically increase tariffs on everything. But if they were to increase it to the rate they want to take it up to, it would take the total duty liability from R370 million to about R7.2 billion," Mackay said at a webinar for industry to discuss the ongoing review. "That's a healthy increase in tariffs. But again to be clear, I don't think it's likely all of this will go up but the problem is we don't know where it will go up." Mackay said the review was in four stages. The first focuses on tariff adjustments aimed at reducing import duties and removing rebates for solar panels. The second stage addresses localisation, which seeks to enhance local content in solar and storage components, up from the current percentages of 45% for solar PV to 50% by 2030, and from 20% to 60% for storage. To enforce this, ITAC is considering export controls on essential minerals, including lithium, manganese, and vanadium, to drive local beneficiation. The third element of the review concerns subsidies, which are anticipated to facilitate additional income tax deductions for businesses engaged in the renewable energy sector. The proposed transformation fund aims to uplift black South Africans, particularly women, within this industry, financed by a levy of 1.5% on project construction costs and an additional 2% on after-tax profits. While this bold initiative aims to encourage inclusivity, it also introduces a complex layer of financial obligations for companies involved. Mackay pointed out the unusual duality in the proposal: while companies may receive extra tax deductions, they are simultaneously faced with increased levies for contributing to the renewable energy market. The intricacies of these plans—still lacking complete clarity—set the stage for a challenging few years ahead, as the industry adapts to a rapidly changing regulatory environment. "It's the plan to 2030, we are in the first stage of it and we don't have more detail on this," Mackay said.
