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GT Shield

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

Regulations

Tax Holiday Regulations (Regulations under section 37H(14))

7. Evaluation criteria

 

(1) To determine the financial viability of a project the board will compare the—
(a) asset management ratios;
(b) debt management ratios;
(c) liquidity ratios; and
(d) profitability ratios,

calculated from the pro forma financial statements submitted with the application, with the ratios of successful projects in the same industrial sector, or, in the absence of such ratios, the ratios which are generally accepted by financial institutions as fair ratios to operate such a project successfully.

 

(2) To determine the effect on national competitiveness of a project the board will have regard to—
(a) where a product to be produced by a project is to be used mainly as an intermediary product (a product which will be used as an input into a final product), the effect which the cost of that intermediary product will have on the competitiveness of that final product on the national or international markets; and
(b) where the product to be produced by a project is a product which has already been successfully manufactured in South Africa, the impact which that product will have on the local market share of existing businesses and their employees.

 

(3) The utilisation of resources will be determined by the board by having regard to the manner and efficiency in which the project intends using raw materials (including components), human resources and funding and the effect the project may have on the environment.

 

(4) Utilisation of competitive technology will be determined by the board by having regard to the extent to which the intended technology to be employed may enhance the competitiveness of the project.

 

(5) The commitment to the upgrading and training of local skills will be determined by the board by having regard to the manner in which the management of the project intends providing and utilising facilities to improve the skills and abilities of their human resources as demonstrated in the training plan submitted as part of the application.