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parliament signs act giving tax breaks for stewardship
A groundbreaking set of mechanisms has been included in the Revenue Laws Amendment Act passed in December 2008, providing incentives for biodiversity conservation by private landowners. This legislation follows years of work by the Botanical Society of South Africa, and according to Tracey Cumming, Coordinator of BotSoc’s Biodiversity and Fiscal Reform Project, funded by DEAT and C.A.P.E., establishes “an excellent new tool to further stewardship work”.
Three different scenarios are addressed by the fiscal mechanisms, to be implemented from the tax year starting 1 March 2009. The extent of the incentive which may be applicable to a particular landowner depends on the level of security of the conservation agreement. More secure agreements, demanding a higher level of commitment and cost from the landowner, may qualify for more substantial incentives.
The most significant incentive, at the highest of the three levels, applies to Nature Reserves and National Parks with a minimum contract of 99 years. These reserves or parks are declared by the Minister or MEC in terms of the Protected Areas Act, in cases where the biodiversity on the land is deemed to be of critical importance. These landowners will be allowed to deduct from their taxable income 10% p.a. of the value of the land declared that is used only for conservation purposes, over a 10-year period.
In unveiling the new mechanisms, Treasury has recognised that landowners making a commitment to securing biodiversity on their land have forgone use rights with inherent value, and also that they often incur substantial costs in managing their land under these agreements. According to a BotSoc statement, the new fiscal mechanisms have thus been developed “to support what is essentially a cost carried by an individual for the public good.”
For more information on the implications of the mechanisms for stewardship, please contact Kerry Purnell at kpurnell@capenature.co.za and on the mechanisms, please contact Tracey Cumming at tracey.cumming@gmail.com
Date posted: 19 January 2009
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