TAX: SA Business Demands More Tax Breaks for Green Investments
Recent Gauteng Business News
A new global survey by workspace solutions provider Regus, has found that 80% of South African companies have declared that government tax breaks are required to accelerate green investment take up.
The Regus survey revealed that only 37% of companies worldwide actually measure their emissions and less than a fifth of companies (19%) measure the carbon footprint left by their activities. 46% of companies globally declare that they will only invest in low-carbon equipment if the running costs are the same or lower than those of conventional equipment. A disappointing 40% have invested in low-carbon equipment and only 38% have a company policy to do so.
In South Africa, the largest emitter in sub-Saharan Africa because of its 90% dependence on coal for electricity,1 the survey found that less than a third (31%) of companies monitor their carbon footprint and less than half have invested in low carbon equipment (42%). A third of companies (33%) had a policy to invest in energy efficient equipment. Running costs were found to be important to 43% of companies that declared that they would only invest in low carbon equipment if it were cheaper or the same to run as conventional equipment. Finally an overwhelming 80% of companies declared that if government offered tax incentives to invest in energy efficient or low-carbon equipment, businesses would significantly accelerate their green investments.
Small companies throughout are below average on their actual and predicted level of green investment, indicating that smaller businesses are harder pressed to select low-carbon equipment when this comes at marginally higher price, as short-term needs are more urgent than long-term investment. In South Africa only 14% of small and medium businesses monitor their carbon foot print compared to compared to 53% of large businesses. Similarly only 30% of small businesses have a company policy to invest in green technology compared to 53% of large businesses. Ambitious government targets are evidently not taking into account the reality of green equipment take up among smaller businesses.
The survey also analysed sector differences. Only 12% of companies in the consultancy services sector measure their carbon footprint, although 44% have invested in low carbon technology. A much higher proportion of companies in the media and marketing sector, 54%, have invested in green equipment and have a company policy to do so. Less than a third (28%) of consultancy firms had a company policy to invest in green equipment.
Joanne Bushell, Vice President Middle East and Africa at Regus, comments:
“Take-up of green equipment and monitoring initiatives is still disappointingly low, particularly for smaller companies. Yet small and medium-sized companies account for half of the any country’s business turnover. If government is serious about stopping growth of GHG emissions by 2020-20252, then it needs to further incentivise the change. At the moment, low-carbon business technology is often limited in range and sold at premium pricing. This is proving an obstacle for businesses to invest. Tax breaks will help enormously, as our survey shows, and by accelerating take-up will also help to create a mass market where unit prices fall.|
“Environmental investments are not limited to technology alone, but need to be applicable to all effective and measurable environmental initiatives, such as the minimisation of premises under-occupancy. Conservative estimates hold that 38% of office space is unoccupied at any given time3, yet that space is still being heated, cooled and lit, generating tonnes of unnecessary carbon emissions each year. Reducing office under-occupancy should therefore be just as eligible for tax breaks as low-energy equipment.”
1 HSBC, Building a green recovery, May 2009
2 HSBC, Building a green recovery, May 2009
3 Regus, A Waste of Space, April 2010
Business News Sector Tags: Finance|