Hundreds of millions of rands flowed into start-up investments this week as the sun set on section 12J of the Income Tax Act, which gave South Africans a 100% tax rebate on investments made through approved venture capital companies (VCCs) into small businesses.

Introduced in 2009, 12J took off after amendments were made in 2015. However, it had a sunset clause: an expiry date of June 30 2021 for new investments. There were high hopes it would be extended but, in the national budget delivered in February, the National Treasury said 12J had not achieved its objectives of developing small business and creating jobs. Instead, “it provided a significant tax deduction to wealthy taxpayers”...

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