In a ground-breaking move to stimulate economic growth and create job and investment opportunities, the eThekwini Municipality has approved the Economic Development Incentive Policy (EDIP) which seeks to offer financial or tax rebates as well as non-financial support for investors.
Deputy Head of the City’s Economic Development and Investment Promotion Unit, Ajiv Maharaj said: “EDIP is one of the key solutions identified to enhance economic investment in eThekwini during the adoption of the Economic Development and Job Creation Strategy in 2013.”
Maharaj said the EDIP will be implemented from 1 July 2016 with the aim of providing property rates tax rebates to developers during the construction period. This will assist in getting developers’ projects off the ground, thereby encouraging urban regeneration and investment in the City.
“This will further deepen investors’ link with local businesses, thus allowing investors to create opportunities for local skills training and education. It will certainly enhance exports,’’ said Maharaj.
He added that while the EDIP is initially planned for three years, it will be reviewed annually to ensure that the City’s response to market requirements is appropriate and beneficial.
To ensure a smooth operation of this process, Maharaj said the Municipality will soon be opening a ‘One-Stop Shop’ to be based in Umngeni Business Park. The purpose of the One-Stop-Shop is to provide support to investors by assisting with information and streamlining administrative processes.
“Other elements within EDIP aimed at facilitating the process include; foreign direct investor assistance, Greenfields development, pegged rates for brownfield investments, rates relief for reinvestment in abandoned and derelict buildings (on which penalty rates are currently charged), incentives for investment in bulk infrastructure, which could be achieved through a public-private partnership and appropriate target sectors. The following sectors have high employment potential, including Green Economy, Tourism, Maritime and Logistics,” explained Maharaj.
Peet Du Plessis, Head of the City’s Revenue Management Unit, said there is no specific fund set aside for this programme, adding that funds will be made available through the Rates Policy. “Qualifying applicants will be afforded incentives based on the value of the development. The rates randage rebate will be calculated based on a formula devised by Treasury and approved by Council,” he said.
Du Plessis said applicants either investors or developers must meet the following criteria: there must be an approved building plan in place, the development shall be for a defined period, the developer shall be under a non-renewable contractual obligation to complete within a defined period and must be up-to date with all their Municipal accounts.
The Policy was well received and applauded by developers who welcomed the tax relief. “This is a win-win solution which will tremendously fast-track Durban’s vision of being Africa’s most liveable City by 2030 as dilapidated buildings will be a thing of the past with this policy in place,” said Tshepiso Kobile of Tongaat Hullets Development.
Applications for this financial year open on 1 July 2016 and close on 30 September 2016. A separate application form for each investment incentive will be available on the eThekwini Municipality’s website: www.durban.gov.za from 1 July. Applications may be subject to a prioritisation and selection process in accordance with the Municipality’s priorities.
For further enquiries about EDIP, kindly email Dr Nuthan Maharaj on Nuthan.firstname.lastname@example.org or call 031 311 7730 or contact Sibusiso Makhathini on 031 311 4794 or email email@example.com