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Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter II : The Taxes

Part I : Normal Tax

24G. Taxable income of toll road operators

 

(1)        For the purposes of this section—

 

"agreement"

means an agreement concluded by the taxpayer in terms of which the taxpayer is entitled to operate a toll road;

 

"ancillary service"

in relation to a toll road, means any—

(a) vehicle service station, breakdown or repair facility;
(b) shop or restaurant;
(c) park, recreation or rest area;
(d) emergency medical or first-aid facility;
(e) hotel or other accommodation; or
(f) entertainment facility,

or other service or facility to which persons or vehicles may gain access from the toll road;

 

"permanent work"

means—

(a) any earthwork, tunnel, bridge, or structure forming part of a toll road, including any building erected for the purpose of housing toll equipment, but excluding any such work constructed or erected solely for the purposes of the repair or maintenance of a toll road; and
(b) the reimbursement for the cost of acquisition or expropriation of land required for the purposes of the toll road, and
(c) any payment made to the South African National Roads Agency Limited in respect of the acquisition of the right to operate a toll road;

[Definition substituted by section 14(1) of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]

 

"road pavement"

means the road surface. road shoulders, sub base, base course, wearing courses, road signage, road markings, lighting, guard rails, tolling equipment, emergency telephone systems, emergency telephone repeater stations, access roads to emergency telephone repeater station sites and other parts and road furniture of a toll road, excluding any permanent work or ancillary service;

 

"single toll road"

means—

(a) a single continuous toll road or portion thereof, or two or more toll roads or portions thereof which are not contiguous but which the Minister of Transport Affairs, after consultation with the Minister of Finance, considers should be regarded as a single toll road; or
(b) two or more toll roads or portions thereof in respect of which a single agreement has been concluded with the South African National Roads Agency Limited;

[Definition substituted by section 14(1) of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]

 

"South African National Roads Agency Limited"

means the South African National Road Agency Limited incorporated in terms of section 3 of the South African National Roads Agency Limited and National Roads Act, 1998 (Act No. 7 of 1998);

[Definition substituted by section 14(1) of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]

 

"tolling period",

in relation to a toll road, means the initial period during which the South African National Roads Agency Limited has granted to the taxpayer or any other person the right to operate such toll road, including any period in respect of which such right was so granted in terms of an interim agreement concluded by the South African National Roads Agency Limited, but excluding any extension of such first-mentioned period in respect of which a right of renewal may be exercised;

[Definition substituted by section 14(1) of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]

 

"toll road"

means a road or section thereof, including any access road, crossroad or ramp constituting a necessary adjunct to such road or section, in respect of which the taxpayer derives or will derive income through the imposition of a toll or the exploitation of the right to impose a toll.

 

(2) Subject to the provisions of subsection (5), there shall be deducted in the determination of the taxable income derived by the taxpayer during any year of assessment—
(a) the sum of any annual allowances determined under subsection (3) in relation to expenditure incurred during the current or any previous year of assessment in respect of any permanent work, road pavement, major rehabilitation of the road pavement or erection or construction of ancillary services in relation to a toll road;
(b) any expenditure incurred during the year of assessment in respect of the repair or maintenance of a toll road or any ancillary service in relation to such toll road, other than expenditure incurred on major rehabilitation of the road pavement;
(c) any interest (other than interest which is deductible under section 11(a)) incurred by the taxpayer during the year of assessment in respect of any loan utilized for the purpose of financing any expenditure contemplated in paragraph (a) or (b); and

[Section 24G(2) substituted by section 41 of the Revenue Laws Amendment Act, 2003 (Act No. 45 of 2003)]

(d) any amount which has been disallowed in the preceding year of assessment under the provisions of subsection (5):

Provided that the aggregate of the allowances which may be granted under paragraph (a) shall not exceed the total expenditure incurred by the taxpayer on such permanent work, road pavement, major rehabilitation of road pavement or erection or construction of ancillary services.

 

(3) For the purposes of subsection (2), an annual allowance shall be calculated in respect of expenditure incurred by the taxpayer on permanent works, road pavements, major rehabilitation of road pavements or the erection, construction, installation or provision of ancillary services during any year of assessment, such allowance to be equal to the expenditure so incurred during the year divided by the lesser of the number of years reckoned from the commencement of that year until the end of the tolling period (for which purpose a portion of a year shall be regarded as a year) and—
(a) in the case of expenditure incurred on permanent works or the erection or construction of ancillary services, 25 years; and
(b) in the case of such expenditure incurred on road pavements or major rehabilitation of road pavements, 8 years.

 

(4) No deduction or allowance shall be granted under this Act in respect of expenditure contemplated in subsection (2) otherwise than as provided in that subsection.

[Section 24G(4) substituted by section 14(1) of the Taxation Laws Amendment Act, 2004 (Act No. 16 of 2004)]

 

(5) The allowances which may be granted under subsection (2)(a), (b) and (d) in any year of assessment in respect of any single toll road shall not in the aggregate exceed the taxable income (as determined before the deduction of the said allowances) derived by the taxpayer during such year from—
(a) the exploitation of such toll road or any ancillary service in relation to such toll road; and
(b) any interest derived in the ordinary course of such exploitation and the financing of any expenditure contemplated in subsection (3) which relates to such toll road.