Depreciation allowances in South Africa
Nowadays, tax depreciation allowances are used less as instruments of macroeconomic stabilization and more as long-term measures to stimulate investment.
This paper tabulates the types of accelerated depreciation allowances in South Africa and calculates the magnitude of these benefits in addition to standard across-the-board accounting depreciation by companies.
Using anonymized tax assessment data from the South African Revenue Service, the analysis generates the aggregate and sectoral composition of tax depreciation and tax investment allowances for 2014–17.
An estimate is offered of the cost to the treasury of these tax expenditures, and of the reduction in the statutory corporate income tax rate should depreciation allowances be terminated.