Naledi Pandor. Picture: GCIS
Naledi Pandor. Picture: GCIS

The department of science and technology has almost eliminated the backlog of applications it has received for tax breaks on research and development (R&D) projects, Science and Technology Minister Naledi Pandor said on Tuesday.

The government offers companies a 50% tax refund on their operational expenses for qualifying R&D activities. The incentive is intended to reduce the after-tax cost of R&D, with spin-offs for both the companies and the economy at large. But take-up of the incentive since its launch in 2006 has been modest as companies battle with red tape, delays, and unexpected rejections.

In 2015, Pandor established a team to review the system and recommend ways of improving the incentives. Briefing reporters ahead of her budget vote speech to Parliament, Pandor said the task team’s recommendations were being implemented: "We have really made progress since 2006."

The department’s deputy director-general for socio-economic innovation partnerships Imraan Patel said the backlog for applications received between 2012 and 2015 had been reduced from 900 to 37. Work is also underway with Treasury to improve the tax incentives, he said. One of the issues the department is looking into is improving things for small-and medium-sized enterprises.

The turnaround time had been reduced from more than 400 days to about 140 days, said the department’s chief director for science and technology investment Godfrey Mashamba.


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