News in South Africa 25th October:
1. Tax breaks for inverters and batteries:
Electricity Minister Kgosientsho Ramokgopa said the government wants more businesses and households to opt for rooftop solar, and efforts are under way to push for a tax incentive to be extended to inverters and batteries part of solar PV systems.
The minister was speaking on Monday during a briefing about the progress of the Energy Action Plan.
Ramokgopa noted that solar rooftop installations had more than doubled to over 4 500MW, since July 2022. He said that the state wants to encourage this, especially through tax incentives that were announced by Finance Minister Enoch Godongwana in February.
Government is offering a 25% tax incentive to households on their solar PV panels. The incentive has been effective since 1 March 2023 and will run until 29 February 2024. Claims are capped at R15 000. The incentive strictly applies to solar panels – and not to inverters or batteries. But Ramokgopa said the incentive must be extended to these components.
“We are advocating for, as a department, that we need to have that incentive to be extended to components of that ‘self-generation mix’ that carries the heaviest capital cost… It shouldn’t just be restricted to PV but also should be extended to batteries and inverters,” he said.
An expanded incentive would see a “considerable uptake” of solar PV systems.
Treasury allocated R4 billion in relief to individuals installing solar panels. Government also allocated R5 billion for the expansion of the renewable energy tax incentive to companies, according to the 2023 Budget Review. Businesses can claim a tax deduction of 125% on the cost of renewable energy projects – this includes solar PV, wind, biomass, hydropower and concentrated solar. The incentive applies for two years – 1 March 2023 to 28 February 2025.
Government also launched the energy bounce-back loan scheme earlier this year for households and small businesses to raise the finances they need to install solar PV. Government guarantees solar-related loans on a 20% first-loss basis, which means government would carry 20% of the loss on defaulted loans.
The loan scheme runs until 30 August 2024 and can be accessed through commercial bank loans.
2. Plans to mitigate chicken shortage:
The first batch of 63 million fertilised eggs ordered to mitigate the expected shortage of chicken meat in South Africa has already landed in the country. The rest will enter our borders in different batches until February next year.
The Department of Agriculture, Land Reform and Rural Development has granted permits for the importation of fertilised eggs, poultry meat and table eggs to mitigate the expected shortage of poultry products due to the outbreak of bird flu in several provinces.
Around six million commercial layers and 2.5 million breeder parents were culled during May and June, sparking fears of a shortage over the festive season, which could translate into higher prices.
Minister of Trade, Industry and Competition Ebrahim Patel has since directed trade commission Itac to investigate the creation of an import duty rebate on meat and edible offal of fresh, chilled or frozen chicken to bolster supplies.
Itac must also consider whether the temporary rebate should only apply to ordinary customs duties or the recently reinstated anti-dumping duties should also be included.
No compensation
Local producers are not compensated for the cost of culling their chickens. They are also losing income on future production from them.
“Now government wants us to compete against dumped chicken on top of that,” says Breitenbach. “That is clearly not in the interest of the industry in the long term.”
In its submission, the Association of Meat Importers and Exporters (Amie) acknowledges the challenges facing the local poultry industry. It recognises the importance of providing some level of protection to balance the playing field and ensure the continued success of the local industry.
However, the ordinary customs duties are extremely high. Amie asks for a reduction to 37% (from the current 62%) on bone-in chicken, 12% (from 42%) on boneless chicken and 0% to frozen offal.
Amie CEO Paul Matthew says 37% is an appropriate position that will allow local producers to remain competitive once they have recovered from the bird flu outbreaks.
Amie believes the highly pathogenic avian influenza outbreaks will lead to significant chicken shortages if market access remains restricted. “Maintaining a stable supply is important for food security.”
3. SARB warns of possible rate hike:
South African Reserve Bank Deputy Governor Fundi Tshazibana said there are too many risks to the inflation outlook to declare that the cycle of interest-rate increases is over.
The central bank’s monetary policy committee has raised interest rates by 475 basis points to 8.25% in its current tightening cycle that started in November 2021 and paused at its last two meetings.
“While many in the public domain are trying to get us to say the hiking cycle is over, as I said, there are too many risks on the horizon for us to pronounce on it,” she said at an event at the Gordon Institute of Business Science in Johannesburg on Tuesday. “We have seen recent price pressures mainly in fuel but also on the food side.”
Annual inflation has remained above the midpoint of the Reserve Bank’s target range of 3% to 6% — where it prefers to anchor expectations — since May 2021. It accelerated to 5.4% in September because of higher energy and food prices.
Tshazibana added that the policy stance “is probably adequate to stabilize inflation at 4.5%.”
In its six-monthly monetary policy review published last week, the bank reiterated that while the rate of price growth has returned to within its target range, it had still not stabilized around the 4.5% midpoint in a convincingly sustainable manner.
The MPC will announce its next rate decision at its final meeting of the year scheduled for Nov. 21-23.
4. Hijacking claims skyrocket:
Vehicle hijacking and theft claims have skyrocketed to unsustainable levels, and insurers are insisting certain clients now install two tracking devices as they try to mitigate the cost of these claims.
This is according to Santam, which recently released its Insurance Barometer report for the 2022/23 financial year ending in the first half of 2023, highlighting that hijackings and vehicle theft claims have increased by 32% and 92%, respectively.
Additionally, the insurer noted that high-value vehicle theft claims shot up by 128% on the commercial side, with criminals targeting delivery trucks.
Commenting on these alarming trends, Santam’s Head of Commercial Lines, Thabo Twalo, explained that if you take 2019 as the base year, Santam’s incurred claims for high-theft-risk vehicles increased sixfold and more than doubled the incurred claims for 2021 – a trajectory that is unsustainable.
Santam’s report noted that the experience was so poor that several corrective actions were needed to minimise exposure – including doubling up on vehicle trackers, discussing tech-linked weaknesses with vehicle manufacturers, and promoting Faraday pouches to prevent the cloning of keyless access signals.
“In some instances, we [Santam] insist – depending on the make and model of the vehicle – that clients install two tracking devices in their cars to try to mitigate the increase in the cost of claims,” said Twalo.
He explained that clients may have two tracking devices from the same company, but it is actually preferred if two devices from two separate companies that use different technologies are installed.
“Criminals have become experts at blocking the signals of certain tracking devices, but having two with different technologies complicates their efforts,” he said.
Twalo added that installing an additional tracking device also reduces your premium. This is also true even if you install one tracking device.
Santam noted in its report that it has seen a shift away from older, low-value vehicles with limited security requirements to more expensive double cabs and SUVs. This aligned with the experiences of private security companies such as Fidelity ADT.
According to Fidelity, vehicles under the Toyota, VW, Ford, and Nissan brands continue to be common targets among criminals, and the specific models include:
- Toyota Hilux, Fortuner, and Corollas
- VW Polos
- Nissan NP200s
However, much like Santam’s experience, Fidelity noted that high-value cars such as Toyota Prados and Toyota Landcruisers are among the most popular models for criminals, along with the Hilux bakkie and Fortuner SUV.
The issue is so persistent with Toyota vehicles that the automaker developed numerous safety upgrades for models with the keyless entry ability, which it started providing to customers free of charge in December 2022.
Santam added that these vehicles, along with other high-value targets, are up to 20 times more likely than similar-priced models to be hijacked or stolen. Unsurprisingly, it added that the two most high-risk provinces for vehicle hijackings and theft are Gauteng and Kwa-Zulu Natal.
5. Illegally connection warnings:
Eskom has warned communities that have benefited from the installation of new transformers in Gauteng that if illegal connections cause its devices to fail, chances of the power utility replacing the device will be slim.
Residents, on the other hand, are wondering where will they get the money to pay for the electricity as they are unemployed.
All information sourced from articles posted by: Fin24, Moneyweb, DailyInvestor, BusinessTech, and TimesLive.
